NRW Holdings (ASX: NWH) and Primero Group Limited (ASX:PGX) today announced they have entered into a Bid Implementation Agreement (“BIA”) for a recommended conditional off-market takeover offer for NRW to acquire all of the fully paid ordinary shares on issue in Primero.
HIGHLIGHTS:
-
NRW announces an unanimously recommended conditional off-market takeover offer of $0.275 cash plus 0.106 NRW shares for each Primero share.
-
Offer price values Primero at $0.55 per Primero share, or a total equity value of ~$100M.
-
Offer represents a:
-
14.6% premium to the closing price on 23 November 2020;
-
30.1% premium to 30 trading day VWAP of Primero shares; and
-
50.5% premium to 60 trading day VWAP of Primero shares.
-
-
Primero Directors unanimously recommend that Primero shareholders accept the Offer, and have agreed to accept the Offer in respect of all Primero shares they own and control as soon as practicable on the day that is 21 days after the Offer has opened, in each case in the absence of a superior proposal.
-
Experienced Primero management team, lead by Cameron Henry to remain with the business under NRW ownership.
-
Offer represents value for both NRW and Primero shareholders.
-
NRW: Primero adds significant Engineering, Procurement and Construction (EPC) capability to NRW’s renamed “Minerals, Energy & Technologies” business pillar.
-
Primero: delivers a meaningful premium to recent market trading levels and avoids the need for a potential significantly dilutive capital raising to fund working capital required to deliver its FY21/22 contracted order book, including the continued non-payment by Wartsila on the residual Barker Inlet Power Station contract monies. Scrip consideration provides ongoing exposure to an ASX 200 company with higher liquidity, a unique and growing platform of diversified services and a balance sheet able to fund further growth.
-
-
NRW to make available to Primero an interim funding facility for up to $10M, to be available to fund working capital requirements through the Offer Period.
Managing Director of NRW, Jules Pemberton, commented:
The acquisition of Primero will provide NRW with the opportunity to expand its Minerals, Energy & Technologies specialised capability and to leverage the combined expertise of both companies to pursue new business initiatives across a large pipeline of opportunities.
It builds on NRW’s recent acquisitions of DIAB Engineering and RCR Mining Technologies and represents a further diversification of our strategic platform to offer clients continuity of services across the whole lifecycle of resource projects – from early planning, design, development, construction to operations and maintenance.
In addition, Primero is also well positioned to future focused energy solutions, including lithium and hydrogen technologies.
NRW and Primero have already been working together on a number of projects and we look forward to continuing to work with the Primero team to build out Primero’s design, construction and operations capabilities through NRW’s client network, and expect that the combined operations of NRW and Primero will present clients, employees and shareholders with compelling outcomes”.
Primero Managing Director, Cameron Henry, said the transaction is compelling for Primero shareholders:
NRW’s Offer provides an attractive outcome to Primero shareholders, allowing shareholders to both crystallise value today at a meaningful premium to recent market trading levels whilst also maintaining continuing exposure through their holding in NRW, one of Australia’s leading and diversified provider of contract services to the resources and infrastructure sectors in Australia. Importantly, the NRW Offer allows Primero to avoid the need for a potential significantly dilutive capital raising to fund working capital required to deliver on our FY21/22 contracted order book, including the continued non-payment by Wartsila on the residual Barker Inlet Power Station contract monies. Primero shareholders will continue to have exposure to Primero’s engineering design, construction and operational services expertise, through the stronger balance sheet of the NRW group. NRW is strongly supportive of the Primero management team’s growth strategy which aligns with NRW’s existing Minerals, Energy & Technologies division and will assist with the transformation and growth of their fourth pillar into a formidable services, technology and operational business unit.
The combination of NRW’s diversified delivery model coupled with the Primero capabilities will provide our client base with a unique end to end delivery model that will differentiate within the current market and will rapidly accelerate Primero’s growth strategy. Our teams have been working well at multiple levels together over the past 12 months and have several projects currently approaching delivery stage that will showcase the model. The combined experienced management teams and strong balance sheet with Primero’s EPC capability provides for a promising future for the combined entity and its shareholders.”
NRW will be hosting a call today, Tuesday 24th November 2020.
The conference call will be hosted by Jules Pemberton, Chief Executive Officer and Managing Director, and Andrew Walsh, Chief Financial Officer of NRW.
The call will commence at 11:00am AWST.
To access the call, use the below link, ideally 10 minutes prior to the call. You will then be taken to a webpage where you will be required to register your details including your phone number. When you select “Click to Join” the number that you have provided will ring and by answering you will be placed into the conference.
https://meet.expressvirtualmeetings.com/EventMeet/rest/users/login?password=s082aj4lspkj8
Please note: If you do encounter any issues, please dial 1300 742 024 for support.