GWA Provides An Update on the Proposed Acquisition of Methven Limited

The Shareholders of Methven Limited have green-lighted the proposed acquisition of Methven by GWA Group Limited (ASX: GWA). In an announcement made by GWA on 12 March 2019, the company announced that the shareholders of Methven have voted in favour of the scheme of arrangement pursuant to which GWA will acquire all of the shares in Methven.

Earlier in February 2019, the company received the consent of the New Zealand Overseas Investment Office under the New Zealand Overseas Investment Act for one of its wholly-owned subsidiaries to acquire all of the shares in Methven Limited.

In order to further proceed with the acquisition, the company now requires approval New Zealand High Court. The Final Court Hearing is scheduled for 27 March 2019.

Methven is a leading designer and manufacturer of showers, taps and valves which are distributed in Australia, China, UK, Middle East, USA, Europe and New Zealand.

The proposed acquisition of Methven was announced in December 2018 when GWA took a major step towards strengthening its water solutions strategy by proposing an acquisition of Methven Ltd via a scheme of arrangement (the Scheme). The shares in Methven will be acquired for a total consideration of around A$112 million or NZ$118 million which will be funded from GWA’s existing debt facilities.

This acquisition holds strategic importance for GWA as this transaction will allow GWA to strengthen its core Australian Business and it will accelerate growth opportunities in bathroom and kitchen fixtures market. Further, the presence of Methven in the international market will help GWA in increasing the regional diversity of its revenue.

The company is expecting the implementation of the Scheme to occur on or around 10 April 2019.

Methven Limited recently released its half-year results for FY 2019. For the half-year period, the company reported revenue of $182.6 million which was 2.6% higher than the previous corresponding period (pcp). Further, the company reported EBITDA of $41.0 million which was 4.2% higher than pcp.

The company has paid an interim dividend of 9.0 cents (fully-franked) for 1H FY19, representing an increase of 5.9% on pcp.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $3.250, up by 2.201% during the day’s trade with a market capitalization of ~$832.35 Million as on 12 March 2019 (AEST 3:23 PM). The counter opened the day at $3.200 and reached the day’s high of $3.260 and touched a day’s low of $3.160 with a daily volume of more than 332,294. The stock has provided a year till date return of 16.06% & also posted returns of 6%, 23.26% & 3.58% over the past six months, three & one-months period respectively. It had a 52-week high price of $3.940 and touched 52 weeks low of $2.940, with an average volume of ~ 716,117.


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