A Complex Acquisition - increasing market share by purchasing a competitor
"This was a mosaic purchase, involving numerous subsidiaries, dozens of sites, a web of leases, dangerous-products licences, revision of employment and superannuation contracts, a change of seller midway and a very compressed timeframe. Added to this was the need for the deal to be agreed by the Foreign Investment Review Board and the ACCC."
John Hutchings, Chairman of Partners
Our Client
Our client is a major civil contracting
company with operations across New Zealand and Australia. The
company employs approximately 5,000 people. Operations are
vertically integrated and range from the supply of products such as
asphalt, quarry and precast components, through to the construction
of roads, water infrastructure, bridges, airports and sports
facilities. The company also provides related services such as
project management, laboratory services and maintenance. The
company is privately owned. We have been working with them since
2000 and have a strong relationship with their directors and
management team.
Their Ambition
Our client had an opportunity to
acquire a competitor, a Melbourne-based company and one of the
largest manufacturers of asphalt in Australia. The company had two
major shareholders, each of whom owned 50%. The original intention
was that one owner would sell its share to the other and our client
would then acquire the entire company. Negotiations between the two
owners were unsuccessful. Our client had to step in quickly to
secure the purchase.
Enhancing their Success
The purchase of the first 50% was
completed successfully and on time and the purchase of the balance
is currently under negotiation. This will expand our client's
manufacturing capabilities and promote it to one of the three
largest manufacturers of asphalt in Australia. Our client's market
share will increase from 4.5% to 30%.
Behind the Headlines
In order to meet the deadline, our firm
deployed considerable resources to the project; at one point the
Cornwall Stodart team comprised 25 lawyers plus support staff. They
were drawn from across our firm from the Banking & Finance,
Corporate & Commercial, Commercial Property and Employment
& Industrial Relations groups.
For more details, please
contact:
John Hutchings, Chairman of
Partners
Phone (direct): +61 3 9608
2245
Email: j.hutchings@cornwalls.com.au