Ebos looks for more acquisitions
Ebos Group is again on the acquisition hunt after shareholders backed a $1.1 billion deal to buy Australian pharmaceutical wholesaler and distributor Symbion.
The huge deal, the biggest for the Christchurch supplier of hospital and healthcare products, will more than double its market capitalisation to $1.35b, which would place it around number 15 within the NZX50.
Shareholders at a special meeting in Christchurch yesterday approved the resolutions without dissent, including the approval of the Symbion purchase for $865 million plus $230m of net debt.
They also approved a 40 per cent shareholding in Ebos to Symbion-owner, Hong Kong-based Zuellig Group (itself owned by a Swiss family), as part of the transaction.
Waller told shareholders Ebos had to put on hold several acquisition opportunities it had been looking at while the Symbion buy was bedded down. "We've got a backlog of opportunities we've had to put on hold."
After the meeting he said that Ebos was now again ready to pursue three potential purchases, two in Australia and one in New Zealand. He did not reveal the size of any of those purchases.
However, he said, Ebos wanted to establish an $80m to $100m annual revenue wholesaling business to supply the veterinarian sector in New Zealand. That could be done either through the purchase of an existing wholesaler or by tapping into Symbion's contacts with manufacturers. Symbion also has ownership of Lyppard, a national wholesaler in Australia with an estimated market share of 30 per cent.
"The key point of difference [with Symbion] is that Ebos does not have a veterinary wholesale operation in New Zealand. We'd like to have one, and we'll now be embarking on as one of our early moves."
Ebos has taken on two Australian-based Zuellig nominees, Peter Williams and Stuart McGregor, as directors. Given that Ebos and Symbion had 50 locations in Australasia there would be geographic opportunities to rationalise premises and share operations, Waller said.
The Christchurch meeting also overwhelmingly approved an increase of $450,000 for directors fees taking the annual total to $975,000, the first increase since 2010. The fees are not paid to Mark Waller.
Changes to allow the company to apply for a listing on the ASX were also approved, though Waller emphasised this would be a secondary listing. Waller and chairman Rick Christie said there had been consideration of the company's head office location but Waller said there were no plans to change the Christchurch location.
Ebos is looking to bring in more Australian institutions as shareholders. Waller also indicated that the Zuellig's 40 per cent shareholding would be locked up or in escrow for the period through to September 2014 and could not be traded.
Ebos shares yesterday closed two cents higher at $9.57, while rights increased 6c to $3.06.
Waller said the shareholder vote was a "fantastic endorsement" of one of the largest transactions in New Zealand in recent times. It would transform Ebos into the largest diversified Australasian marketer, wholesaler and distributor of healthcare, medical and pharmaceutical products by revenue and a leading Australasian animal care products marketer, wholesaler and distributor.
The settlement is expected to take place about July 5.