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Salmat supersizes with $318 million HPA takeover

Thursday, 19 July 2007
By Print 21 Online Article

Taking advantage of its clearance by the corporate regulator, ACCC, which found there was no competition issues in the takeover, Salmat has moved to reinforce its position as the largest provider in the sector. The takeover values HPA at $318 million and represents a 36 per cent premium to HPA’s closing share price of $2 on 9 April this year.

HPA’s board of directors each recommended the offer as being in the best interests of shareholders, with major shareholder, Kodak, showing its support for the acquisition. Kodak with over 50 per cent holding and a desire to get out provoked the sale by insisting on a call for tenders.

“The transaction is a unique opportunity to create the leading business one-to-one communication force in Australia and benefits both sets of employees, customers and shareholders,” said Peter Mattick, joint managing director of Salmat.

“The offer price of $2.725 per HPA share represents an attractive price, which has secured the unanimous support of the HPA Board and the support of its major shareholder. We feel this is an exciting opportunity to capitalise on the strong and complimentary services that each business brings to the combined group.”

The process has been a long and drawn-out one for Salmat, which was made wait for approval from the ACCC earlier this year before moving in for the kill. It was always considered the favourite as it will be able to extract costs and gain major synergies from the acquisition.

Salmat lists advantages such as 50 years of combined industry experience; deeper product and service capabilities; the scope to be a broader and growing group with wider career opportunities and becoming a larger combined group with a focus on both innovation and growth opportunities in Australia and Asia.

“Salmat’s revenue streams will be strengthened through the addition of HPA’s products, services and blue chip customers,” said Phil Salter, joint managing director of Salmat. “From an operational view, we have identified significant cost synergy and capital efficiencies which will enhance the profitability of the combined group.

“The strategic and cultural fit between HPA and Salmat is excellent and we look forward to completing the sales process as quickly as possible for the benefit of all shareholders, employees, customers and suppliers.”

The deal will be implemented in late October this year.

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