The Board of LogiCamms Limited (ASX: LCM) is pleased to announce the signing of a binding Share Sale and Purchase Agreement with OSD Pty Limited under which the companies have agreed to a proposed merger to create a strong ASX-listed mid-tier engineering business with more than 550 employees and forecast pro forma FY19 normalised EBITDAI of approximately $6.7 million.
The Directors unanimously recommend LogiCamms shareholders vote in favour of the proposed merger, in the absence of a superior proposal and subject to an independent expert concluding that the merger is fair or reasonable to LogiCamms shareholders.
- The proposed merger will create a strong ASX-listed mid-tier engineering, project delivery, technology, asset services and training group with specialist offerings across a range of industries throughout Australia, New Zealand and the Pacific.
- Current LogiCamms shareholders will own 41% and current OSD shareholders will own 59% of the merged business.
- OSD is a respected multi-discipline engineering services business with a strong pedigree and track record, long term client relationships and experienced senior management with their own capital invested in the business.
- The combined business will have pro forma forecast FY19 revenue of approximately $120 million and pro forma forecast FY19 normalised EBITDAI of approximately $6.7 million. As of January 2019, the combined businesses had aggregate work in hand of $57 million.
- Upon completion, LogiCamms will have a significantly strengthened balance sheet, benefiting from OSD’s net cash at 22 March 2019 of approximately $6.9 million.
- The merger combines complementary expertise, aligned cultures and operating methods, and creates an expanded client base and greater capability to win and service larger and more complex projects.
- LogiCamms and OSD have identified initial cost synergies of approximately $3 million per annum with additional cost and revenue synergies expected over time. A detailed post-merger integration plan is being developed which will deliver better outcomes for employees and clients as well as shareholders.
- The proposed merger is unanimously recommended by the Board of LogiCamms in the absence of a superior proposal and subject to an independent expert concluding that the merger is fair and/or reasonable to LogiCamms shareholders.