Valmec shareholders offered 29pc premium for $52 million Altrad takeover
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Private French construction firm Altrad will takeover WA energy and infrastructure services company Valmec (ASX:VMX) in a $52 million deal.
The 41.3 cents per share cash offer to acquire Valmec via a scheme of arrangement has been recommend unanimously by the Valmec board and is being supported by two of its largest shareholders, who collectively control 18.8% of the company.
Valmec shareholders have enjoyed an 88% rise in the value of the stock they hold over the past year, and the sale price is both a 29.1% premium to Valmec’s last traded price of 32 cents and higher than any price Valmec has traded at over the past 5 years.
It is also a 29.4 and 29.3% premium to the one and three month volume-weighted average price.
The company recently bumped up the value of its order book to $215 million including a major contract to provide asset services to power provider Origin Energy (ASX: ORG).
It has seen a turnaround as the resource, engineering and construction sectors have recovered post-pandemic, with Valmec reporting a 45% increase in sales revenue in the first half of 2021 of $61.1 million along with record EBITDA of $6.1 million and a record $7.3 million cash flow.
While it has reported a pipeline of potential construction and services awards of $1.1 billion, Valmec says “Altrad has the scale, strength and global experience to invest in and grow the Valmec business in a manner that would be difficult to achieve were the Company to remain a relatively small, ASX-listed company.”
As part of the transaction, Steve Dropulich will remain the managing director of Valmec and have a 2% shareholding in the company post takeover.
“The proposed transaction is a testament to the entire Valmec team and the work that has been undertaken to grow this company,” he said.
“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.”
Altrad CEO Ran Oren said the deal will back the French firm’s growth ambitions in Australia and the Asia-Pacific region. It has around 36,000 staff across 50 countries.
In the six months to December 31, 2020, Altrad reported revenue of €1.24 billion (~A$1.96b) and EBITDA of €169m (~A$268m).
“Australia and the broader Asia-Pacific region are a key pillar in Altrad’s global growth strategy, which is why I am delighted we have been able to agree terms with the Board of Valmec to merge this strong business into our existing operations,” he said.
“Our committed investment reflects Altrad’s confidence in our Australian team and the growth prospects for our business here.”
The scheme is subject to a number of conditions including an expert report and court approvals.
Shareholders will vote on the scheme at a meeting currently scheduled for the week of October 11, with the arrangement expected to be implemented by the last week of that month.