The Valmec Ltd (ASX: VMX) share price is soaring today after the company received an acquisition offer valuing it 29% higher than its market capitalisation at previous close.
Right now, shares in Valmec are swapping hands for 40 cents apiece – 25% higher than its previous closing price.
The energy service group has recommended its shareholders vote in favour of the offer, which would see Valmec acquired by Altrad Australia Pty Ltd.
Let's take a closer look at the news driving the Valmec share price higher this morning.
Valmec's acquisition offer
Valmec has entered into a scheme of implementation for Altrad Australia to buy around 98% of all outstanding Valmec shares for 41.3 cents apiece in cash.
That represents a 29.1% premium on the Valmec share price's previous close and a 29.4% premium on its 1-month volume-weighted average price.
The offer values Valmec at around $52 million.
Altrad is an industrial services provider with operations in more than 50 countries. Valmec specialises in providing equipment, construction, and maintenance services to the oil, gas, energy, and infrastructure sectors.
According to Valmec, 2 Valmec shareholders who together hold 18.8% of Valmec's shares intend to vote in favour of the scheme.
Additionally, all Valmec's board members who have holdings in the company also intend to vote in favour.
As part of the scheme, Valmec's managing director Steve Dropulich will retain around 2% of Valmec's shares. He will also continue in his role after the acquisition.
The scheme of implementation is dependent on: an independent expert's declaration the acquisition is in Valmec shareholders' best interests, the absence of a superior offer, and shareholder and court approval.
The company expects its shareholders will be given a chance to vote on the acquisition in mid-October.
Commentary from management
Dropulich commented on the news, saying:
To be recognised and attract the interest of a global leader such as Altrad is a clear recognition of the hard work, dedication and professionalism of our staff and the strong support we have received from our shareholders throughout our journey.
Altrad's CEO Ran Oren also commented:
Australia and the broader Asia-Pacific region are a key pillar in Altrad's global growth strategy, which is why I am delighted we have been able to agree terms with the Board of Valmec to merge this strong business into our existing operations. Our committed investment reflects Altrad's confidence in our Australian team and the growth prospects for our business here.
Valmec share price snapshot
Today's gains have added to a good year on the ASX for Valmec.
Right now, the Valmec share price has gained 67.5% since the beginning of 2021. It has also gained 168% since this time last year.
The company has a market capitalisation of around $50 million, with approximately 125 million shares outstanding.
