K&S Corporation will merge with Scott Corporation

K&S Corporation will merge with Scott Corporation (SCC), subject to shareholder acceptance. SCC shareholders who accept the Offer will receive either $0.59 cash or 0.345 K&S shares under the offer in consideration for each of their SCC shares, plus a fully-franked special dividend to be paid by SCC of $0.05 per SCC share.

For SCC shareholders who elect to receive cash this equates to a total value of $0.64 per SCC share. The members of SCC’s independent board committee intend to recommend the offer, subject to there being no superior proposal and an independent expert determining that the offer is fair and reasonable.

Each member of SCC’s independent board committee intends to accept the offer in respect of their SCC shareholdings, in the absence of a superior proposal and subject to an independent expert determining that the offer is fair and reasonable. SCC’s major shareholder, A.A. Scott Pty Ltd, has advised SCC’s independent board committee that it supports the offer and intends to accept SCC is a national carrier with expertise in the transport of bulk solids, liquids and explosives by road, rail and sea.

The company reported annual revenue of $187 million and net profit after tax of $4.33 million for FY13. SCC has four operating divisions catering to a diverse range of transport and logistics needs. Chemtrans carries dangerous acids, liquids, chemicals and other specialist goods.

Bulktrans carries dry bulk goods including coal, agricultural and waste products and has historically focused on New South Wales. Energytrans carries fuels and lubricants primarily into the mining sector in Queensland.

Hyde Park Tank Depot in Melbourne is a one-stop-shop for tanker and ISO container cleaning and repairs. Chairman of SCC’s independent board committee Brett Johnson said: “Scott Corporation’s independent board committee believes that K&S Corporation’s offer recognises the strategic value of our business, our blue-chip customer base, and our investment in a modern fleet of specialised assets.

“Scott Corporation’s independent board committee intends to unanimously recommend the K&S Corporation offer, subject to there being no superior proposal and an independent expert determining that the K&S Corporation offer is fair and reasonable.” K&S deputy chairman and lead independent director Greg Boulton said: “K&S Corporation’s Board views a merger with Scott Corporation as an excellent way to expand the scope and scale of our existing business. “Scott Corporation operates in different functional and geographic markets to K&S Corporation and offers an opportunity to diversify our business. With its exposure to the resources sector, we see Scott Corporation’s business as being highly complementary to K&S Corporation.

“The offer comprises a 33.3% premium to the last closing price of Scott Corporation shares before it was announced that K&S Corporation had approached Scott Corporation.”