Johns Lyng accepts $1b takeover bid
Johns Lyng Group has agreed to a buyout bid worth more than $1 billion from Pacific Equity Partners.
The insurer-focused building services company said this morning it has entered a scheme implementation deed with Sherwood BidCo, an entity owned and controlled by funds the Australian private equity investor manages.
The scheme values listed group Johns Lyng’s equity at about $1.1 billion and implies an enterprise value of $1.3 billion.
Johns Lyng’s independent board committee unanimously backs the offer and has recommended shareholders accept it “in the absence of a superior” bid and subject to an independent expert concluding it is in their best interests, the group said.
Shareholders will vote on the offer in meetings likely to be held in October. The deal is expected to be implemented in November, pending clearance of other hurdles including Federal Court approval.
“We are pleased that [Pacific Equity Partners] has recognised the value of [our] integrated building services operations across Australia, New Zealand and the US,” Johns Lyng chair Peter Nash said.
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He says the board committee’s recommendation is based on a “thorough evaluation of a range of factors … and the potential medium-term share price without the scheme, and taking into consideration JLG’s underlying business performance over the last two years and current business momentum.
“The scheme is an attractive transaction that provides ... shareholders with the opportunity to receive cash at a material premium.”
Shareholders will receive $4 cash per stock – a 77% premium on Johns Lyng’s closing share price on May 15, the day before it received the non-binding and indicative offer.
The group entered a trading halt on June 10 after a newspaper reported on the approach from Pacific Equity Partners. It confirmed the offer the next day.
The bid has the support of Johns Lyng CEO and MD Scott Didier, whose 17.64% holding makes him the group’s largest shareholder.
He has entered a co-operation deed under which he agrees to vote in favour of the scheme and against any competing offer.
Pacific Equity Partners MD Matthew Robinson says Johns Lyng’s management team have “built a strong business with a distinctive culture. We look forward to working with the company and its employees in continuing to support customers into the future.”