GUD bids for materials handling market leader


GUD Holdings unveils friendly takeover of Dexion, a leading provider of solutions for the industrial and commercial storage markets in Australia, New Zealand, Asia and the Middle East

May 24, 2010

GUD Holdings has unveiled a friendly takeover of Dexion, a leading provider of solutions for the industrial and commercial storage markets in Australia, New Zealand, Asia and the Middle East.

Under the agreement, subject to completion of due diligence, the consumer and industrial products manufacturer will make an off-market takeover bid to acquire all the issued shares in Dexion.

The proposed offer is pitched at 80 cents a share, reflecting a 100 percent premium to Dexion’s share price of 40 cents at close of trade on May 20. This equates to an equity valuation and enterprise valuation of $84 million and $109 million respectively, and represents an EBITA multiple of 9.5 times based on the mid-point of Dexion’s earnings guidance for the year ending December 31, 2010.

GUD expects the acquisition, if it proceeds, will be earnings per share accretive in the first full year of ownership.

The takeover will be funded using existing cash and committed bank facilities; however, GUD is currently in the process of determining its preferred acquisition funding mix.

GUD Chairman Clive Hall says the rationale for the proposed offer is "clear and compelling, and provides benefits for both sets of shareholders."

"For Dexion shareholders, the offer represents an excellent price for their shares at what can only be regarded as an extremely attractive premium that provides certainty of value today."

GUD Managing Director Ian Campbell adds the takeover will further diversify the company’s portfolio to include industrial and commercial storage solutions where Dexion is the clear leader in the Australian and New Zealand markets.

Dexion manufactures and markets a broad range of storage products, including pallet racking, shelving and automated systems used in logistics and warehousing; and storage and filing solutions including cabinets, shelving and filing systems, lockers and mobile storage used in the commercial office sectors.

"Moreover, the acquisition will result in a significant growth platform for GUD, adding an international dimension to the company as well as providing access to growth sectors in distribution and third-party logistics," Campbell says.

Dexion has around 750 employees and operations throughout the Asia Pacific region and the Middle East, with manufacturing facilities in Australia, China, Malaysia and New Zealand.

"With our financial resources and access to capital, we expect to support and accelerate these opportunities," he says.

The offer is subject to a 90 percent minimum acceptance condition, receipt of regulatory approvals and other customary conditions.

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