Ebos buys Symbion for $1.1b

17:00, May 29 2013
Ebos Group’s purchase is detailed at a briefing by Mark Waller, managing director.
CHANGING TIMES: Ebos Group’s purchase is detailed at a briefing by Mark Waller, managing director.

Ebos Group says a $1.1 billion deal to buy Australian pharmaceutical wholesaler and distributor Symbion will not dilute its commitment to keeping its headquarters in Christchurch.

The huge deal, the biggest for the Christchurch supplier of hospital and healthcare products, will more than double its market capitalisation to $1.35b.

Ebos' revenues will leap to $6b from about $1.5b now.

The deal to buy Symbion from Hong Kong-based Zuellig Group will bring in Zuellig as a 40 per cent shareholder.

But Ebos managing director Mark Waller said he saw Zuellig as a "passive" investor, even though it had a controlling stake, saying he had known the private company for 20 years.

Asked about Zuellig's control and say at Ebos, Waller said: "Well they're going to have two directors out of eight, and Patrick [Davies, chief executive of Symbion] will be reporting into me and joining our senior exec team as will some of his colleagues in due course.


"For us it's business as usual. We've got two really big successful businesses and there's no change there."

Zuellig were committed to staying as shareholders until September 2014 and had not indicated any intention to sell down, he said.

Waller was committed to staying on in management as part of the "once in a 20-year deal" which saw the combination of two businesses working in similar pharmaceutical fields but in geographically separate areas either side of the Tasman.

"Ebos and Symbion are actually the market leaders in their respective geographies. So you're actually bringing together the two best companies in both markets, that's a pretty rare feat," Waller said.

He called Christchurch "a notional head office" given a relatively small number of the management team based there and the amount of travel he did including to Australia.

Ebos is looking for an ASX listing across the Tasman by the end of the year as part of the purchase which is bringing in more Australian institutions as shareholders.

There had been five months of due diligence from both parties, Waller said.

The Symbion purchase will need the approval of shareholders at a meeting to be held in Christchurch on June 14.

New Zealand brokers were positive about the purchase.

Ebos shares last traded at $9.90, ahead of the formalisation of a bookbuild with institutions. The company had hit a record intraday trading high of $10.01 on May 23.

Hamilton Hindin Greene broker Grant Williamson said given the size of Ebos, Symbion was "a huge acquisition", but Ebos had a good track record of bedding down such deals.

Zuellig was unlikely to take too strong a stance in stamping its authority on Ebos.

"I would hope they're going to be a longterm cornerstone shareholder, and maybe that just shows the confidence they [Zuellig] have in Ebos and the business they're selling . . ," Williamson said.

"Certainly they will have a say in how things are run."



1922 – Company founded as Early Brothers Trading Co Ltd.

1960 – Lists on the New Zealand Stock Exchange.

1986 – Name changed to Ebos Group Ltd.

1990 – Kempthorne Medical Supplies Ltd is bought.

1993 – Establishes separate divisions to focus on market segments.

1996 – Buys NSW private medical wholesaler Richard Thompson & Co. 2006 – Attains NZX top 50 listing.

007 – Buys pharmaceutical wholesaler PRNZ (ProPharma & Healthcare Logistics). 2011 – Pays $105m for Masterpet, including 50 per cent of Animates pet store group. 2013 – Buys Symbion.


Ebos is buying Australian pharmaceutical wholesale business, Symbion, from Zuellig, for $367 million in cash. That money will come from Ebos borrowing $140m and raising $239m by issuing new shares. $90m of new Ebos shares will be bought by institutions. Ebos will also issue $149m of new shares which Ebos shareholders can buy but don't have to. The remainder of the purchase price, $498m, will be through issuing new shares to Zuellig to give it 40 per cent of the enlarged group. In addition Ebos will assume $230m of debt from Symbion. Ebos will become the third largest New Zealand company on the NZX by revenue, behind Fonterra and Fletcher Building. About 75 per cent of revenues will come from Australia. Its market cap will rise from $524m to around $1.25 billion. There were about 3000 small investors, owning 60 per cent of Ebos, before the Symbion deal.