ALS rejects $1.93-bn takeover bid from private equity firms Advent and Bain Capital
03 Jun 2016
ALS Limited, an Australian provider of analytical laboratory service yesterday rejected an unsolicited A$2.67 billion ($1.93 billion) takeover bid from private equity firms Advent International and Bain Capital, saying that the offer significantly undervalued the company.
The PE firms had on 1 June offered to buy ALS for $5.30 per share, a 31 per cent premium to the company's last closing price of $4.05.
The highly conditional offer of $5.30 per share would not be adjusted for the $0.06 FY 2016 final dividend.
The Australian Stock Exchange-listed company said, ''The Board of ALS, having reviewed the Proposal with the Company's advisers, has unanimously rejected the approach as it significantly undervalues the Company.''
''The indicative price of $5.30 per share, does not recognise the fundamental value inherent in the global leadership position of many of the company's service streams, implies a premium of 22.3 per cent to the 1 month VWAP which is significantly below market average for transactions of this nature.''
It also ''represents a multiple of 11.7x FY 17 EV/EBITDA based on broker consensus forecasts, which is materially below the average trading multiple for global peers in the TIC sector of 12.5x2,; and represents a multiple of 11.9x3 FY16 EV / EBITDA which is materially below the most recent comparable transaction in the sector, the sale of LGC in December 2015, which was completed at a multiple of 14.2x LTM EV/EBITDA''
Bain and Advent were surprised at ALS' swift rejection of their indicative offer. "We are extremely surprised and disappointed that the board of ALS did not accept our indicative offer and the speed with which they have rejected it," a spokesman said.
"With the ALS board's support, we were ready to start due diligence in an expedited manner and finalise a proposal."
The private equity firms said that the offer not only offers compelling value to the shareholders but "also provides access to sector expertise, capital and people, away from the pressures of the public markets."
Tracing its origins to 1863 when Peter Morrison Campbell first established a soap making business in Queensland, ALS is today one of the world's largest and most diversified testing services providers.
Employing more than 13,000 people in more than 350 locations, in 55 countries, and on six continents, ALS processes more than 20 million samples per year.
Its major hub facilities are located in Australia, Asia, North America, South America, Europe, the Middle East and Africa.
Its major business is its international testing services business focusing through its four divisions: Minerals (geochemistry, metallurgy, mine site and inspection); Life Sciences (environmental, food & pharmaceutical, animal health and electronics); Energy (coal and oil & gas); and Industrial (asset care and tribology).
