Scott Technology shareholders vote overwhelmingly in favour of JBS deal

Some 97% of voting shares were in favour of a scheme of arrangement between Scott and JBS Australia.

Scott Technology [NZX: SCT] shareholders overwhelmingly backed a deal handing control of the robotics manufacturer to Brazilian meat processor JBS.

Some 97% of voting shares were in favour of a scheme of arrangement between Scott and JBS Australia, which will give the Brazilian company's subsidiary 50.1% ownership, buying 10 million shares at $1.39 apiece. JBS will buy about 22% from existing shareholders at the same price and top up its stake buying $5.2 million of shares in a rights issue. Existing shareholders will stump up about $2.8 million in the rights issue.

"Scott is excited to welcome JBS as a strategic partner and cornerstone shareholder which will allow Scott's future growth aspirations to be achieved in a quicker timeframe and with potential for global scale that JBS brings as a customer to the Scott business," chairman Stuart McLauchlan and chief executive Chris Hopkins said in a statement.

The JBS deal was put forward in August as a way for the manufacturer to access capital after shareholders baulked at the prospect of providing more funding. The deal would see JBS buy shares and offer to buy stock from existing shareholders, before lifting its stake to at least 50.01% through a rights issue, which was also open to existing shareholders.

An independent adviser's report valued Scott at between $1.08 and $1.26, and said the JBS offer was fully priced, though the shares were traditionally illiquid and their decline since early 2014 coincided with a sharp slowdown in the mining sector weighing on the company's margins and earnings.

With shareholder approval, the transaction now requires High Court sign-off on the scheme of arrangement and clearance from the Overseas Investment Office.

Chairman McLauchlan told shareholders at yesterday's special meeting in Dunedin that the capital from JBS would allow the company to scale its business and take advantages of the opportunities available to it, with the 2016 year "shaping up well due to the order books filling up" with a weaker kiwi dollar making it more competitive in North America.

Hopkins said Scott anticipates organic growth by commercialising its technology but continues to look at buying new businesses "where they make sense and meet our assessment criteria."