ALS Limited (ASX:ALQ) entered into an agreement to acquire Reservoir Group Ltd. from SCF Partners, Reservoir management and other shareholders for approximately $470 million on July 16, 2013. The deal value includes net debt of Reservoir as at March 31, 2013 and issue of 5.7 million shares of ALS as part of consideration to Reservoir senior management in exchange for 50% of their equity in Reservoir. Multi-year conditional escrow arrangements have been put in place for the two largest management shareholders and retention bonuses have been agreed with all key Reservoir senior management. In a related transaction, ALS Limited entered into an agreement to acquire Earth Data Pty Limited for AUD 18 million ($16.35 million) on July 16, 2013.
The transactions will be funded through an underwritten 1 for 11 pro-rata accelerated renounceable entitlement offer to raise approximately AUD 246 million ($223.51 million), approximately AUD 299 million ($271.66 million) drawn from a new $275 million debt facility and approximately AUD 8 million ($7.27 million) from ALS' cash reserves. Reservoir Group reported revenues of $223 million, EBITDA of $55 million and EBITA of $44 million for the year ended March 31, 2013.
Reservoir will be integrated into ALS' Energy Division. The existing senior management team of Reservoir has committed to stay with ALS. The acquisition is conditional on ALS securing U.S. antitrust approval and no material adverse change in Reservoir. The transaction follows extensive due diligence undertaken by ALS on Reservoir as a part of an exclusive sale process. The transaction is expected to close by early August 2013. The transaction is expected to be accretive to earnings per share of ALS Limited for the financial year 2014. JP Morgan Australia Limited acted as financial advisor while Gary Goldman and Gillian Brown of Minter Ellison acted as legal advisors for ALS limited for equity and debt financing for the deal. Vinson & Elkins LLP acted as legal advisor for Reservoir Group Ltd. Richard Blunt, Charles Whitefoord and Jannan Crozier of London based Baker & McKenzie LLP and Jonathan Newton, William D Davis II, Matthew Martin, Veronica Nunn and Heath Trisdale of Baker & McKenzie, LLP acted as legal advisor for ALS limited. The currency conversions have been made from www.oanda.com for July 16, 2013.
ALS Limited (ASX:ALQ) completed the acquisition of Reservoir Group Ltd. from SCF Partners, Reservoir management and other shareholders on August 8, 2013.
ALS Limited is an Australia-based company that is engaged in the provision of professional technical services. The Company provides services primarily in the areas of testing, measurement and inspection, supporting environmental monitoring, food and pharmaceutical quality assurance, and mining and mineral exploration. The Companyâs segments include Commodities and Life Sciences. The Commodities segment provides assaying and analytical testing services and metallurgical services for mining and mineral exploration companies and provides specialist services to the coal industry, such as coal sampling, analysis and certification, formation evaluation services, tribology testing services and related analytical testing. The Life Sciences segment provides analytical testing data to assist consulting and engineering firms, industry, and governments around the world in making informed decisions about environmental, food and pharmaceutical, electronics, consumer products, and animal health.
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