Pacific Equity Partners to Acquire Johns Lyng Group

The Board of Directors of Melbourne-based Johns Lyng Group, Australia’s leading integrated building services provider, on Friday unanimously recommended that its shareholders vote in favour of a proposed takeover of the building services provider by Sherwood BidCo Pty Ltd, owned funds managed and advised by Pacific Equity Partners (PEP) Pty Limited, which was announced last month.

The decision was taken in the absence of a Superior Proposal and subject to the Independent Expert concluding (and continuing to conclude) that the proposal was in the best interests of JLG shareholders, the company said in a bourse filing with Australian Securities Exchange (ASX) in the morning.

The acquisition would see PEP acquire 100% of Johns Lyng’s shares at a price of $2.64 per share. It implies a premium of 77% to the closing share price at 15 May, when the offer was first made. Johns Lyng shares last closed at $2.09. The offer represents an equity value of $720 million and implies an enterprise value of $860 million.

Even the company’s largest shareholder, Managing Director and Chief Executive Scott Didier, will vote his 17.64% share in favour of the move. Shareholders are set to vote on the scheme in October, Johns Lyng said.

Attractive Transaction

Johns Lyng Chairman Peter Nash said that PEP has recognised the value of his company’s integrated building services operations across Australia, New Zealand and the US and the proposal is an attractive transaction that provides Johns Lyng Group’s shareholders with the opportunity to receive cash at a material premium.

The company’s Independent Board Committee’s unanimous recommendation was based on a thorough evaluation of a range of factors including JLG’s intrinsic value under different scenarios and the potential medium-term share price without the proposal, and taking into consideration Johns Lyng Group’s underlying business performance over the last two years and current business momentum, he said.

PEP Managing Director, Matthew Robinson, said that Scott and the management team of Johns Lyng Group have built a strong business with a distinctive culture. PEP is looking forward to working with the company and its employees in continuing to support customers into the future.