Zuellig likely to be passive investor in Ebos, MD Waller says
Privately-held Zuellig Group is likely to be a passive investor in Ebos Group as it takes a 40 percent stake in the local healthcare and veterinary products wholesaler as part of a $1.1 billion deal, Ebos managing director Mark Waller says.
Hong Kong-based Zuellig will get $397 million in cash and take a $498 million cornerstone stake in Ebos as part of the sale of its Symbion pharmaceutical unit in Australia to the New Zealand company. Ebos will also take on net debt of $230 million, taking the total to $1.1 billion.
Mr Waller told a media conference in Auckland the Hong Kong-based group has been "hugely supportive" of the New Zealand firm and he anticipates Zuellig will be a "passive" investor, with its two directors on the expanded board.
"If we've got good ideas, they'll back it," Mr Waller said. "They're not hands-on running things."
The Ebos stake gives Zuellig vertical integration in New Zealand, with its 30 percent stake in listed pharmacy retailer Pharmacybrands. Zuellig reaps $US12 billion a year sales from its healthcare, agri-business and agricultural equipment firms across the Asia-Pacific.
Mr Waller said the Zuellig shareholding "will create other opportunities" given its scale across Asia-Pacific, though this acquisition will need time to bed in.
Zuellig's investment has an escrow period where it cannot sell any shares until the end of September next year or the announcement of the 2014 annual result, and Mr Waller said he did not expect the group will lower its stake.
The companies have a long-standing relationship dating many years, including a 2007 deal where Ebos bought Zuellig's PRNZ unit for $87 million.
Ebos is raising $239 million and taking on new debt to fund the acquisition and its shares are in a trading halt while it holds a bookbuild for a $90 million placement to institutional investors at $8.50 a share. It will hold a $149 million 7 for 20 pro-rata renounceable entitlement offer to existing shareholders.
The shares rose 0.5 percent to $9.90 yesterday, having climbed 19 percent this year. The stock is rated an average 'buy' based on two analyst recommendations compiled by Reuters, with a median target price of $8.36.