Adamantem makes $69m bid for Australia's Legend Corp
The board of Australian electrical products manufacturer Legend Corporation has endorsed a takeover bid from Adamantem Capital at an enterprise valuation of A$100.6 million ($69.7 million).
The private equity firm is willing to acquire all outstanding shares for A$0.365 apiece – a 17.7% premium to the May 17 closing price – through a scheme of arrangement. This may include payment of a special dividend. The directors, who own 30.83% of Legend, will vote their shares in favor of the deal. The company’s stock jumped approximately 20% on May 24 to close at A$0.38.
“The proposed transaction represents a compelling value and liquidity opportunity for all Legend shareholders relative to recent trading prices and volumes,” Bruce Higgins, the company’s chairman, said in a statement. Legend’s share price hasn’t surpassed A$0.38 since late 2007 and it spent three years below A$0.25 until a spike towards the end of last summer.
Operating under the Cabac brand, the company supplies a wide range of electrical products to the construction and engineering industries, including connectors, cable jointing systems, wiring systems, and related tools. It also manufacturers circuit board modules, power systems, and fiber optic cable, as well as components for defense sector applications.
Revenue reached A$114.0 million for the 12 months ended June 2018, up 14.7% from a year earlier. The electrical, power and infrastructure division accounted for two-thirds of revenue. Over the same period, net profit rose 59.8% to A$5.9 million. For the six months ended December 2018, revenue and net profit were A$67.7 million and A$4.1 million.
Adamantem was established in 2016 by Anthony Kerwick and Rob Koczkar, both formerly of Pacific Equity Partners. The firm, which closed its debut fund at A$608 million in March 2018, invests in companies across Australia and New Zealand with enterprise valuations of A$100-500 million.
Current portfolio companies include New Zealand-based aged care provider Heritage Lifecare, horse feed manufacturer Hygain Holdings, data analytics business Servian, meat products processor Hellers, and home care provider Zenitas Healthcare.
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