Private equity firm Adamantem Capital is set to pounce on ASX-listed electrical and power consumables distributor Legend Corporation.
Street Talk understands Sydney-based Adamantem is in late stages talks to acquire Legend Corp and is close to finalising funding to make the acquisition possible.
The proposed deal is expected to value Legend Corp at about $100 million. The company's shares closed at 32¢ on Wednesday and it had a $68 million market capitalisation.
The mooted deal comes 2½ years after Legend Corp first told shareholders it had hired Gresham Advisory Partners to help with a strategic review.
The last time Legend Corp mentioned it - in February - the review was said to be "ongoing" and "actively investigating strategic options to create shareholder value".
If it comes up trumps - with an offer from Adamantem, as expected - it would have to mark the end of one of the longer running strategic reviews in the market.
Legend Corp is a below-the-radar micro cap that counts Thorney Group as its biggest institutional shareholder. The only other substantial shareholders are CEO Brad Dowe and Keith Knowles. The company reported $4.1 million profit for the six months to December 31 on $68 million revenue.
Its attractions are said to be an established position in its core product categories and its preferred supplier status to the electrical wholesale end market. This means there is some level of defensiveness to its earnings.
Should Adamantem Capital secure its target, it would be the firm's second public-to-private deal in the past year. The other was ASX-listed community based healthcare business Zenitas Healthcare.
It would also be the sixth investment in Adamantem’s portfolio since it closed its maiden $600 million fund in 2017.
Luminis Partners and Gilbert + Tobin are advising Adamantem, while Gresham and MinterEllison are tending to Legend Corp.
LGD Price at posting:
31.0¢ Sentiment: Buy Disclosure: Held
