Engineering contractor Calibre Group has announced a radical restructuring that includes a partial buyout of minority shareholders, delisting from the ASX, and the purchase of Sydney-based company Diona for $45 million.
Engineering contractor Calibre Group has announced a radical restructuring that includes a partial buyout of minority shareholders, delisting from the ASX, and the purchase of Sydney-based company Diona for $45 million.
Calibre is offering to buy up to 59.8 million of its own shares at a 30-day volume-weighted average price of 12 cents each, capped at $7.2 million.
The cap also represents 16.89 per cent of Calibre’s total issued share capital. Its largest shareholders, private equity fund First Reserve Corporation and Calibre director Ray Munro, have told the company that they will not participate in the buy-back.
First Reserve, which has been the company’s largest shareholder since it listed in 2012, owns a 59 per cent stake in Calibre, while Mr Munro owns an 11 per cent stake.
In a statement, Calibre said the board considered a delisting to be in the best interests of the company in light of the low level of trading of its shares, coupled with the view that Calibre’s market capitalisation didn’t reflect the underlying asset value of the business.
Calibre shares were worth $1.46 each when it first listed, but after being hit with weak returns in a tough 2013 market, its stock plummeted to less than 40 cents that April.
Since then, Calibre shares have gradually declined to 12.7 cents each as of last Monday.
It was founded in Perth and had a focus on work in the mining sector, but later moved its head office to Melbourne and shifted its focus more towards the infrastructure and land development sectors.
“The board believes that the financial, administrative and compliance obligations and costs associated with maintaining an ASX listing are no longer justified, nor is the high level of compliance costs in the best interests of all shareholders,” the company said.
“Calibre has sought in-principle advice from the ASX for its removal from the official list. ASX has advised that, in accordance with Calibre’s request, ASX would be likely to agree with Calibre’s removal.”
The company also announced today that it had signed an agreement to acquire New South Wales-based civil engineering contractor Diona for $45 million on a ‘cash and debt-free’ basis.
Calibre managing director Peter Reichler said the Diona acquisition provided the company with a platform to grow in the utilities infrastructure sector.
“Diona has annual service revenues of over $100 million and has a number of panel contracts with its key customers,” he said.
“The acquisition will assist in the further acceleration of Calibre’s diversification strategy into the water, gas and electricity sectors.”
The vendors of Diona will not receive any shares in Calibre as part of the transaction, and there will be no change to Calibre’s board as a result of the deal.
However, Calibre said it would review the composition of its board once it has delisted from the ASX.
Calibre expects to be delisted by the end of the year.
