Skilled Group swallowed by rival Programmed Maintenance
Programmed Maintenance’s acquisition of Skilled Group with a sweetened offer of $1.79 per share is highly symbolic of what’s happening to the Australian economy as the mining boom fades.
Frank Hargrave was a self-employed electrician who set up Australia’s first contract labour business in 1964, outsourcing the services of skilled tradesmen in a company then known as Skilled Engineering, and his mantra in those early days was to keep “your head down and your arse up”.
The company has since grown to one with annual revenues of $1.8 billion and a workforce of 50,000 and is now known as Skilled Group.
But on Wednesday morning, it became part of another symbolic shift in corporate Australia as the mining boom fades into the distance, being bought out by rival Programmed Maintenance in a deal which values Skilled shares at $1.79 each.
The merged Programmed-Skilled entity will be worth about $755 million and will be run by Programmed chief executive Chris Sutherland, with Skilled chief executive Angus McKay to depart after just six months at the helm. The sweetened deal means Skilled shareholders will receive 0.55 Programmed shares plus 25¢ in cash. It values the business Skilled at around $422 million, with Programmed’s market capitalisation at $332 million prior to a trading halt on Monday.
The deal, which is being done via a scheme of arrangement, ends 21 years of Skilled Group being a separately listed company on the Australian Stock Exchange. It roared onto the bourse in 1994 and was one of the best performing companies in its first 12 months, as the share price climbed from $1 a share to $3.50.
But the sharp slide in the mining sector – and oil and gas – has caught up with Skilled and Perth-based Programmed. In a softer economy both have agreed there are substantial cost savings of more than $20 million in pre-tax synergies by putting the companies together and stripping out head office and administrative costs. They expect cost savings to reach $35 million after three years.
Skilled has been able to demand a better deal after originally sending Programmed packing in January this year after it first came knocking with merger overtures in December last year. That original offer by Programmed was pitched at 0.5032 Programmed shares and 25¢ for each Skilled share.
Source:- www.smh.com.au
Interested in joining our team? Why not apply today?
About Our Traineeships:-
Join the Market Leader in 2016 – Accounting Traineeships
Looking to study a B.Com at University of Newcastle in 2016?
Bottrell Business Consultants are a Multi Award Winning Firm
We have 2016 Traineeships available – work 3 days Study part-time 2 days
Apply now to Tara Skippen on tara@bottrellaccounting.com.au – send resume & cover letter
www.bottrellaccounting.com.au or check us out on Facebook, Twitter, Instagram or LinkedIn
Offices – East Maitland | Newcastle | Sydney | Melbourne | Brisbane | Gold Coast
Bottrell Business Consultants Pty Ltd – Chartered Accountants and Business Advisors.
The Bottrell group incorporates Bottrell Business Consultants, Bottrell Accounting & Taxation, Maitland Accounting & Taxation, East Maitland Accounting Services and Mobile Bookkeeping & Recruitment.
Our group of businesses & links include the following companies (& our websites);-
- Bottrell Accounting & Taxation – Visit out website
- Bottrel Business Consultants Pty Ltd – Visit our website
- Maitland Accounting & Taxation – Visit our website
- East Maitland Accounting Services – Visit our website
- Mobile Bookkeeping & Recruitment – Visit our website
Comments are closed.