"Business as usual" will continue across Cervus's seven Victorian John Deere dealerships, the company's Australian arm says
Canadian equipment supplier Cervus Equipment, which has seven dealerships across Victoria, is the subject of a takeover offer by fellow Canadian company Brandt.
Cervus has seven dealerships across Victoria: in Hamilton, Colac, Sunshine, Ballarat, Leongatha, Terang and Maffra. Aside from John Deere products, they also distribute Kuhn, Hustler, Bogballe, Goldacres and Wacker Neuson-branded products.
Offering US$19.50 per share in cash, it is estimated the total sum of the acquisition will be US$302 million – excluding the Cervus shares Brandt already owns. This represents a 37 per cent premium to the 20-day volume-weighted average share price.
The arrangement agreement between the two suppliers is set to create one of the largest privately held dealership groups in the world while also enhancing Cervus’ ability to execute on its strategy of delivering best-in-class equipment to its customers.
Entering into the arrangement agreement with Brandt was based on the unanimous recommendations from the Cervus board of directors following an extensive review into the company which analysed what would be in the best interests of Cervus and its shareholders.
The review recommended the transaction represented ‘compelling value’ to Cervus shareholders. The deal also provided certainty of value and liquidity in that the transaction does not contain a financing condition and the consideration will be paid in cash.
Support from major original equipment manufacturers, such as John Deere Canada, has also been garnered while the CIBC Capital Markets has also provided a fairness opinion on the transaction, suggesting the agreement is ‘fair, from a financial point of view’.
Cervus chief executive and president, Angela Lekatsas, says the agreement will be beneficial for all involved.
“This transaction delivers tremendous value for our shareholders and clearly demonstrates the successful execution of our strategy,” says Lekatsas.
“As a private company with a committed, well-capitalised and long-term owner, Cervus will be better positioned for the next stage of evolutionary growth for our dealerships.
“The size and scale of the entity created by the combination of our two companies will allow for increased investment into Cervus for the benefit of our employees and customers.”
Like many arranged agreements, the transaction will be subject to shareholder approval whereby a two-third majority of all votes cast at a shareholder meeting must be in favour of the transaction.
The shareholder meeting is expected to take place in October this year and, if successful, the transaction is expected to close in the fourth quarter of 2021.
Cervus is a leading agriculture and transportation equipment provider across Canada, Australia and New Zealand and is the authorised representative for major brands including John Deere, Doosan and Clark.
A spokesperson from Cervus Australia indicated that it is just ‘business as usual’ until the shareholder approval meeting has been announced and the results are finalised.