French engineering group Altrad Services it set to acquire listed contractor Valmec, in a deal that values the Kewdale business at $52 million.
The companies, which service the mining, infrastructure, and energy sectors, have entered into a binding scheme implementation deed through which Altrad has proposed to acquire all Valmec’s issued capital for 41.3 cents per share.
It represents almost a 30 per cent premium to Valmec’s last closing price of 32 cents, on July 16.
The board considers it an attractive offer, unanimously recommending Valmec shareholders vote in favour of the deal.
Managing director Steve Dropulich will continue in his role and retain about a 2 per cent shareholding in the company.
All Valmec’s directors – including Mr Dropulich, who has an additional 5.3 million Valmec shares (representing 4 per cent) – have agreed to vote in favour of the scheme, along with two additional shareholders representing almost 19 per cent of Valmec’s issued capital.
“To be recognised and attract the interest of a global leader such as Altrad is a clear recognition of the hard work, dedication and professionalism of our staff and the strong support we have received from our shareholders throughout our journey.”
“This provides a great opportunity for shareholders to realise value at a significant premium to the prevailing market price,” he said.
“The quality of this offer is further strengthened in that it comprises 100 per cent cash consideration as opposed to both cash and scrip components, which is often the case in transactions of this nature.”
The business has around 1,200 staff in WA, making it the state’s 11th largest contractor, according to Business News’ Data & Insights.
Meanwhile, Valmec has 130 staff and is ranked 50th.
The business recently reported a strong first half for 2021, with sales revenue up 45 per cent to $61.1 million.
Its order book stood at $215 million in February.
Altrad chief executive (Asia Pacific) Neil Sadler said the acquisition was a transformational milestone for the company’s local business.
Group CEO Ran Oren said Australia and the broader Asia Pacific region were key pillars in Altrad’s global growth strategy.
“Our committed investment reflects Altrad’s confidence in our Australian team and the growth prospects for our business here,” he said.
Valmec closed up 25 per cent on today’s news, to trade at 40 cents per share. That implies a market capitalisation of about $40.3 million.