Australia's ALS rejects Advent, Bain buyout offer

Advent and Bain offered to acquire all of the shares in ALS at a price of A$5.30 per share, according to a filing by ALS. This represents a 4% premium to the stock's price of A$5.09 in afternoon trading on June 3. The company's current market capitalization stands at about A$2.6 billion.

ALS, which conducts laboratory testwork for a range of industrial and scientific sectors, said the offer significantly undervalued the company, especially in light of an advancing growth strategy within its life sciences division. This unit marked a 13.7% increase in revenue during the 2016 financial year to A$633.5 million and accounted for 46% of total company revenue.

Overall revenue, however, fell 4% during the 2016 financial year to about A$1.4 billion. ALS recorded a loss of $240.7 million for 2016, compared to a loss of A$174.5 million the prior year. The loss was attributed primarily to a non-cash impairment of A$314 million on the company's oil and gas assets. In February, the company expanded its energy exposure by acquiring Maverick Testing Laboratories, a US-based testing services company focused on the North American oil and gas market.

Bain's third Asia fund, inclusive of Australia, closed in late 2015 at a hard cap of $3 billion plus a GP commitment of at least $250 million. Advent closed its eighth global fund earlier this year at a hard cap of $13 billion.

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• Topics
• Australasia
• Industrials
• Buyouts
• Support services
• Australia
• Bain Capital Asia
• Advent International