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Slater and Gordon announces the acquisition of Trilby Misso Lawyers Limited and a $40m capital raising
- Slater and Gordon to acquire leading Queensland personal injury litigation firm Trilby Misso for $57 million
- Trilby Misso provides expanded geographic coverage
- Acquisition is in the order of 9% annualised earnings per share accretive in FY11*
- Transaction to be equity funded through a fully underwritten placement and a non-under written SPP totalling $40 million**
Slater and Gordon Limited (Slater and Gordon) (ASX: SGH) announced today that it has entered into an agreement to acquire leading Queensland personal injury litigation firm Trilby Misso Lawyers Limited (Trilby Misso) for $57 million.
The acquisition of Trilby Misso will be a boost to Slater and Gordon’s strategic goal of leading the Australian personal injuries litigation market.
The acquisition will be funded by a combination of cash, equity and deferred consideration and is expected to be in the order of 9% annualised earnings per share accretive in FY11*.
Slater and Gordon also announced today a capital raising to raise approximately $40 million at $1.40 per share to fund the cash component of the acquisition.
Slater and Gordon Managing Director Andrew Grech described Trilby Misso as the perfect vehicle to advance the company’s long held ambition to grow its personal injury market share in Queensland. “Trilby Misso delivers growth that would have taken us a number of years and a heavy investment to achieve organically,” he said. “It also gives us a fantastic revenue base and highly skilled and experienced practitioners.”
Trilby Misso employs 150 people across its five offices in south east Queensland. It also operates an extensive referral network across the state. 53% of the practice is in motor vehicle accident claims and 40% is in workers compensation.
Mr Grech said “I have long admired the dedication to providing highly professional service shown by the Trilby Misso team.”
The acquisition brings together two of the best known names in the Queensland personal injury litigation sector. In brand awareness surveys from 2009 Trilby Misso enjoyed 76% total (prompted and unprompted) awareness in Brisbane while Slater and Gordon recorded 59%. The next highest firm was measured at 32%.
The Trilby Misso business will continue to operate as a stand alone business under the Trilby Misso name after the acquisition.
“With two such powerful brand names, it makes sense to keep both going and there is certainly a place for both in the marketplace,” Mr Grech said. “We plan to have the Trilby Misso and Slater and Gordon businesses focused on what each does best.”
The vendors of Trilby Misso, who will not be transferring to Slater and Gordon, have not played any active role in operations for some time. They have however developed a highly qualified and experienced management team which will continue to run the business post acquisition. The senior staff are shareholders in Trilby Misso and will receive over 95% of their consideration as equity in Slater & Gordon, subject to a reducing escrow over three years.
Austock Corporate Finance acted as corporate and financial advisor to the Trilby Misso acquisition.
The capital raising comprises a A$38 million share placement to sophisticated and professional investors (“Placement”) and a share purchase plan to raise approximately A$2 million to eligible shareholders to subscribe for up to A$15,000 worth of new ordinary shares in Slater and Gordon (“New Shares”) (“SPP”).
The Placement is being conducted in two parts:
a) A$23.5 million fully underwritten unconditional share placement to sophisticated and
professional investors (“Tranche 1 Placement”); and
b) A$14.5 million conditional share placement to sophisticated and professional investors, conducted in conjunction with the Tranche 1 Placement and to be completed and underwritten conditional on shareholder approval (“Tranche 2 Placement”).
The Tranche 1 Placement and Tranche 2 Placement were conducted together and offered to sophisticated and professional investors at an issue price of $1.40 per New Share, compared with the closing price of $1.50 per share on 23 June 2010, the last day of trading prior to the trading halt. Slater and Gordon will issue approximately 16.8 million New Shares under the Tranche 1 Placement. It is expected that the New Shares issued under the Tranche 1 Placement will be allotted on 1 July 2010.
Completion of the Tranche 2 Placement is conditional on shareholder approval at an Extraordinary General Meeting of shareholders to be held on 9 August 2010. Those professional and sophisticated investors who participated in the Tranche 2 Placement will be ineligible to vote on the resolution at the Extraordinary General Meeting to approve the Tranche 2 Placement. Subject to shareholder approval and following the Extraordinary General Meeting, Slater and Gordon will issue approximately 10.3 million New Shares under the Tranche 2 Placement.
A Notice of Extraordinary General Meeting and accompanying Explanatory Memorandum will be provided to shareholders shortly.
Share Purchase Plan
Following the Placement, Slater and Gordon intends to offer eligible shareholders the opportunity to participate in a non-underwritten SPP. The SPP will provide eligible shareholders with the opportunity to pay up to A$15,000 to subscribe for New Shares at the same issue price of New Shares under the Placement, being $1.40 per New Share, without incurring brokerage and other transaction costs. The maximum participation level is $15,000 and we estimate the number of eligible shareholders to be approximately 1,127.
Further details of the SPP will be provided to eligible shareholders shortly. The record date for participation in the SPP was 7.00pm (Melbourne time), 25 June 2010.
All New Shares issued under the capital raising will rank equally with existing shares.
This announcement has been prepared for publication in Australia and may not be released or distributed in the United States or to "US persons" (as defined in Regulation S under the US Securities Act of 1933, as amended (the “US Securities Act”)) ("US Persons"). This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or to any person that is, or is acting for the account or benefit of, a U.S. person or any other jurisdiction. Any securities described in this announcement have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons except in transactions exempt from, or not subject to, the registration of the US Securities Act and applicable US state securities laws.
Neither this announcement nor any other documents relating to the offer of new shares may be sent or distributed to persons in the United States or to US Persons or to any persons acting for the account or benefit of US Persons.
This announcement contains certain “forward-looking statements”. Forward looking words such as, “expect”, “should”, “could”, “may”, “predict”, “plan”, “will”, “believe”, “forecast”, “estimate”, “target” and other similar expressions are intended to identify forward-looking statements within the meaning of securities laws of applicable jurisdictions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward looking statements, opinions and estimates provided in this announcement are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements, opinions and estimates are not guarantees of future performance.
Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially. Such forward-looking statements only speak as to the date of this announcement and Slater and Gordon assumes no obligation to update such information.
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