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MMS blinded by Eclipx
Posted on Thursday, 08 November 2018 14:49
McMillan Shakespeare (MMS) has announced plans to acquire Australian rival Eclipx Group for around AUD 910.97 million (USD 662.13 million), in a bid to create a leading salary packaging and fleet management company.

Under the terms of the deal, being described as a merger, the target’s shareholders will receive 0.14 of the buyer’s stock, plus 46.00 cents in cash for each scrip held, implying a total value of AUD 2.85 per security.

The offer represents a premium of 23.9 per cent to Eclipx’s close of AUD 2.30, when the group had a market capitalisation of AUD 853.43 million.

Shares in the business increased 16.1 per cent to AUD 2.67 at 16:10 local time today, following the announcement.

MMS is expecting the addition of Eclipx to deliver earnings before interest, taxes, depreciation and amortisation synergies of USD 50.00 million per year following the integration, while boosting earnings per share pre-synergies.

The transaction has already been approved by the target’s board, which is due to expand to include three of the buyer’s directors, and will be put to stockholders for approval in early 2019.

Closing is slated for the first quarter of next year, after it retains all necessary receipts.

Eclipx is a leading provider of fleet, equipment leasing and management, vehicle rentals and online auction services to customers in Australia and New Zealand.

At 30th September 2018, the group had 117,060 vehicles with AUD 2.40 billion in assets under management, including brands FleetPartners, CarLoans.com.au, Right2Drive and AutoSelect.

Eclipx became a takeover target after cutting its annual profit guidance in August due to a slowdown in the auction activity at its business GraysOnline.

The company posted a 39.0 per cent increase in net operating income to AUD 159.30 million in the six months to 31st March 2018, with net profit after tax and amortisation totalling AUD 38.50 million, an increase of 23.0 per cent year-on-year.

Eclipx is due to announce its 12-month results for the year to 30th September 2018 on 14th November.

MMS has operations across Australasia, as well as in the UK, and provides leasing, salary packaging and associated fridge benefits tax administration and management.

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