Downer EDI has closed its $1.3 billion takeover offer for Spotless Group, with the engineering company announcing a controlling interest of 87.5 per cent.
Earlier this month Downer extended its $1.3 billion takeover bid for the ninth time for remaining shareholders. At the time of the extension the engineering company said the offer was final and would not extend beyond 28 August.
In July Spotless reluctantly advised shareholders to accept Downer’s offer of $1.15 cash per share after months of urging shareholders to reject the bid.
Last week Spotless reported a net loss after tax of $347.4 million for the financial year ending 30 June 2017.
The company’s sales revenue of $3006.3 million was 5.3 per cent down from the prior corresponding period, which the group said reflects prior period lost contracts and scope reductions, partially offset by the contribution from newly mobilised Public Private Partnerships (PPPs) contracts.
Spotless’ EPITDA of $199.2 million was significantly impacted by $464.3 million of impairments, asset write-downs, takeover and transaction costs and other restructuring items following the restructure of the existing contract portfolio.
Its contract renewal rates, however, improved to 93 per cent by number and 76 per cent by annual value. New contract wins also increased during the period to 66 per cent by number and 21 per cent by annual value.
The company’s operating cash flows of $190.6 million demonstrated improvement in working capital management and cash collections and, together with decreased net capital expenditure, represents a 119.8 million improvement in free cash flow (before payments for acquisitions)) from the prior corresponding period.
Spotless appoints CEO and chairman
Spotless chief operating officer Dana Nelson was appointed CEO and managing director of Spotless Group last week, effective immediately.
Nelson’s appointment follows the resignation of former CEO and managing director Martin Sheppard after two years in the role.
Nelson has been the chief operating officer of Spotless since July 2015. Before joining Spotless, Nelson was the managing director of Australia and New Zealand for Delaware North.
Professor John Humphrey was also appointed chairman of the board, effective immediately, following the retirement of Garry Hounsell after six months in the role.
Nelson has been the chief operating officer of Spotless since July 2015. Before joining Spotless, Nelson was the managing director of Australia and New Zealand for Delaware North.
Professor Humphrey served as independent non-executive director at Downer EDI Limited between 2001 and 2016. He is currently the executive Dean of the Faculty of Law at Queensland University of Technology and a Legal Consultant to King & Wood Mallesons.
Last month four Downer nominees were appointed to the Spotless board and three Spotless non-executive directors resigned from the board.
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