By Rebecca Howard
April 30 (BusinessDesk) - Ebos Group plans to raise $150 million in a discounted placement to pay down bank debt and
reduce gearing as it eyes acquisition targets.
The pharmaceutical and animal health products company said it will issue approximately 7.7 million new ordinary shares
at an issue price of $19.70 each to institutional investors in Australia, New Zealand and selected jurisdictions. That's
about 5 percent of the 152.8 million shares on issue.
The price represents an 8 percent discount to yesterday's closing price of $21.42. The placement is fully underwritten
by UBS New Zealand, which is acting as sole lead manager and underwriter.
"Proceeds from the placement will initially be used to pay down bank debt and reduce gearing, before being used for
strategic acquisitions, organic growth initiatives and general corporate purposes as they arise," the company said.
Following the placement, pro-forma net debt to earnings before interest, tax, depreciation and amortisation as at Dec.
31, 2018, will decrease to approximately 1.6 times from 2.16 times.
The reduced level of gearing will give it greater flexibility to pursue strategic acquisitions and organic growth
initiatives, it said.
"Ebos is assessing several acquisition targets within our core segments that will add greater diversification to the
group and provide synergies through the use of Ebos' existing network and capabilities," said chief executive John
It said it is considering a number of bolt-on M opportunities across both the healthcare and animal care segments, including opportunities to acquire healthcare
consumer brands, opportunities in the medical devices and consumables sectors, pharmacy sector expansion and expansion
in animal care.
Several organic growth opportunities may also require capital, including funding the development of existing brands into
new growth markets such as Asia.
Ebos has invested more than A$600 million in acquisitions and capital expenditure since the 2014 financial year. Key
purchases included Black Hawk for A$57 million in 2014, Red Seal, for $80 million in 2015 and HPS for A$154 million in
The six months through December were marked by several strategic acquisitions for a total investment of A$92.5 million.
They included a move to 100 percent ownership of Terry White Group along with another three small-to-medium sized
The dual-listed company has a market capitalisation of approximately $3.27 billion and generated $7 billion of revenue
last year, 79 percent in Australia and 21 percent in New Zealand.
Ebos also confirmed its full-year guidance of underlying earnings growth in FY19 with further growth forecast into FY20
as it commences servicing Chemist Warehouse contract volumes.
Ebos has signed a contract with Chemist Warehouse Group for the exclusive wholesale distribution of pharmaceutical
products to more than 450 Chemist Warehouse and My Chemist stores in Australia from July 1.
Sales to the CWG stores are estimated to generate approximately A$1 billion in revenue in the 2020 financial year.