CHAMP in $192m take-private bid for Gerard Lighting
CHAMP Private Equity has launched a A$186 million ($192 million) takeover bid for Australian light fittings distributor Gerard Lighting Group. The bid has won unanimous approval from Gerard’s board and the Gerard family, which has a 52% stake, has said it will vote in favor of the deal in the absence of a better offer. It puts the company on course to go private just over two years after it listed.
Gerard's stock was up 26% to A$1.01 on Wednesday in response to news of CHAMP's bid. Prior to that, it was down about 5.5% on a one-year basis.
CHAMP has offered A$1.05 in cash for all outstanding shares, a 40% premium to the July 13 closing price and a 49% premium to the company's three-month trading average. The investment would be made via CHAMP Buyout III Fund, a A$1.47 billion vehicle that closed in November 2010.
"The Gerard Lighting Group is a market leader with strong growth prospects, led by a committed executive group and as such is the type of company in which CHAMP likes to invest," said John Haddock, a managing director at the private equity firm.
Gerard distributes light fittings to industrial and wholesale clients under the Pierlite brand. It also has agency agreements with several international lighting companies, such as Hoffmeister and Philips, and earlier this year completed the acquisitions of Dot Lighting and Home Lighting. The company expects to post a net profit of A$17.5-18.5 million for the year ending June 2012.
Gerard announced a net profit of A$19.5 million for 2010-2011, up from A$10.7 million the previous year, on the back of operating revenues of A$404 million.
A number of private equity firms are seeking take-private deals in Australia, responding in part to lower public market valuations. Pacific Equity Partners (PEP) secured the A$720 million buyout of cleaning and catering services contractor Spotless at the end of April. Since then TPG Capital has tried and failed to land struggling clothing brand Billabong, while last week Crescent Capital offered A$220 million for Clearview Wealth.
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