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No sale: Private equity bidders can Vocus takeover talks

21 Aug 2017

The two private equity companies bidding for Vocus Group have pulled out of sale discussions

In June United States private equity group Kohlberg Kravis Roberts & Co LP made a bid to acquire 100% of shares in Vocus at $3.50 per share. That was followed in July by a similar bid from Affinity Equity Partners, who matched the KKR bid at $3.50 per share.

“Throughout the due diligence process the bidders indicated support for managements strategic plans and transformation program,” Vocus says.

“However, the bidders have now adviced that they are unable to support a transaction on terms acceptable to the board.

“Accordingly all discussions have now ceased.”

The news saw Vocus share prices drop earlier today.

David Spence, Vocus chairman, says “Following the receipt of the initial, indicative proposals from the two parties, we believed it was in shareholders’ best interests to grant those parties the opportunity to conduct non-exclusive due diligence.”

At the time of the Kohlberg Kravis Roberts and Co bid, Spence noted that the Vocus board believed the management of Vocus had established ‘a strong strategi plan’ to deliver value to shareholders in the short and medium term’ but believed it was in the interests of the shareholders to grant KKR due diligence.

Spence says throughout the process Vocus has continued to pursue its standalone business plans and its transformation program.

Vocus says it is forecasting revenue growth to between $1.9 billion and $2 billion and underlying EBITDA growth to between $370 million to $390 million for financial 2018.

“Notwithstanding the competitive market conditions, and the increased costs associated with the migration of customers to the NBN, the board is confident that the company can deliver a return to sustainable organic growth following a year of transition in FY17,” Vocus says.

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