27th Jan 2021 10:25
(Alliance News) - Scapa Group PLC and Schweitzer-Mauduit International Inc on Wednesday announced they had agreed terms for a cash offer that values Scapa at around GBP402.9 million.
Schweitzer-Mauduit is a product engineering and manufacturing company with its global headquarters in Alpharetta, in the US state of Georgia. Its AMS Holdco 2 Ltd subsidiary will offer 210 pence per share for Ashton-under-Lyne, England-based healthcare and industrial firm Scapa.
The price per share represents a 59% premium to Scapa's 132.5p per share six-month volume weighted average price on Tuesday and a 19% premium to its Tuesday closing price of 177p.
Shares in Scapa were up 25% at 222.0 million in London on Wednesday morning.
The deal values Scapa's entire share capital at around GBP402.9 million and represents an enterprise value to earnings before interest, tax, depreciation, and amortisation multiple of 11.3 times on a reported basis for the financial year ended March 31, 2020.
In its 2020 financial year, Scapa made a GBP51.0 million pretax loss on revenue of GBP320.6 million due to exceptional charges.
Scapa's directors intend to recommend unanimously that the company's shareholders vote in favour of the buy and have irrevocably undertaken to vote in respect of their own beneficial holding totalling 1.2 million shares or a 0.7% stake in Scapa.
Non-binding letters of intends have also been received in respect of 30.0 million Scapa shares, a 16% stake.
Chair Chris Brinsmead said: "Scapa has successfully executed a strategy of bringing best-in-class innovation, design and manufacturing solutions to a diverse customer base in the healthcare and industrials sectors. We therefore believe there will be significant potential business benefits in the proposed combination with SWM that will enhance both the further execution of this strategy and the growth trajectory of Scapa's business, versus that on a standalone basis.
"Additionally, while Scapa has demonstrated considerable resilience, significant business uncertainties continue to persist in the near and medium term for a company of our relative size. Therefore, the Scapa directors intend to unanimously recommend the offer."
By Anna Farley; [email protected]
Copyright 2021 Alliance News Limited. All Rights Reserved.
Related Shares:
SCPA.L