re: Ann: Acquisition of Reservoir and $246 Mi...
ALS launches $580m oil and gas play Date July 16, 2013 - 9:23AM (0) Read later Brian Robins View more articles from Brian Robins
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Laboratory testing group ALS, formerly known as Campbell Bros, has dived into the oil and gas sector, with the $US533 million ($A579 million) purchase of a large oil and gas operator, Reservoir Group.
The purchase will be funded through a 1-for-11 rights issue priced at $7.80 a share, a handy discount to its last traded share price of $9.41.
The share issue will raise $246 million with the balance of the purchase price to be funded via borrowings.
The acquisition will be earnings a share accretive from fiscal 2014, ALS said.
Advertisement The purchase is at a multiple of more than two times annual revenues of $US223 million, with earnings before interest, tax, depreciation and amortisation of $55 million, pricing the purchase at a multiple of just over 10-times pretax profit.
Along with the purchase of Reservoir, ALS is to pay $18 million for a local group Earth Data, which also services the oil and gas sector.
ALS also confirmed investor fears that it too has been hit hard by the slowdown in resource-sector spending, flagging a six months to September net profit of $95-105 million, down 26 per cent.
This is after including an initial contribution of an estimated $4-$5 million from the acquisitions outlined to investors today.
Markets for its geochemical and coal services activities are "challenging" it said
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