HTML Preview Proposal Thank You Letter page number 1.
6 June 2016
Dear Shareholder
ALS Rejection of Non-Binding Indicative Proposal
On Thursday 2 June 2016, ALS Limited (“ALS” or the “Company”) announced that it had received an
indicative, non-binding and highly conditional proposal from Advent International and Bain Capital to
acquire all of the shares in ALS for a cash consideration of $5.30 per ALS share ("the Proposal").
Your Board carefully reviewed the Proposal with our advisers and concluded that the opportunistic
approach significantly undervalues the Company. Consequently your Board unanimously decided to
REJECT the Proposal.
It is worth highlighting that the indicative price of $5.30 per share:
does not recognise the fundamental value inherent in the global leadership position of many of
the Company’s service streams;
implies a premium of 22.3% to the 1 month Volume Weighted Average Price (VWAP) which is
significantly below the Australian market average for transactions of this nature;
represents a multiple of 2017 EV/EBITDA which is materially below the average trading multiple
for global peers in the Testing Inspection Certification (TIC) sector; and
represents a multiple of 2016 EV / EBITDA which is materially below the most recent
comparable transaction in the sector, the sale of LGC in December 2015.
ALS is a world-class company with a platform that is strongly positioned to benefit from the positive
trends in Life Sciences business and leverage the upturn in the cycle for its Minerals business.
The Life Sciences business, which now accounts for 46% of ALS’s revenue, grew revenue by 14% in FY
2016 and has demonstrated a Compound Annual Growth Rate (CAGR) of 16.6% since 2010. We expect to
continue to see strong growth in this business over the coming years.
Whilst commodity-based industries generally face near term headwinds, ALS has maintained
geographical scale and market position in its cyclical businesses to provide leverage and outperformance
as the cycle recovers.
The Company has consulted with a number of its major shareholders and received strong support for the
Board’s decision to reject the Proposal.
Your Board remains committed to maximising value for shareholders and will consider all options
available to achieve that objective.
The Board notes that shareholders do not need to take any action regarding the Proposal.
You can find a copy of the release that was put out to the ASX along with our results for the year which
were announced last week, and presentation for investors on our website www.alsglobal.com. You can
check the website for any updates.
Thank you for your continued support.
Yours sincerely
Nerolie Withnall
Chairman