IAWS Co-op in €64m bid for SWS
It has offered €64 million for key parts of the business of which €42.5m may be paid up front.
The co-ops will also have a share option scheme to choose from if they so wish under the terms of the deal. Initially the package on offer from Philip Lynch, chief executive IAWS Co-op, was €50m, with earn out bonuses still to be decided.
That initial offer was scaled back following due diligence which found some of the SWS operations due to be part of the deal behind schedule.
In particular these included the Kerry- and Clare-based wind plants, currently under construction.
It is understood those delays were confirmed to a surprised SWS management by Mr Lynch at a tough meeting held in Bandon on Wednesday when final details of the financial package were worked out.
SWS is an agri-services company with interests in natural resources, wind energy, forestry, biomass, waste and outsourcing services.
Under the terms of the offer, the maximum consideration payable will be €64 million, of which €42.5m will fall due on completion of the buyout process.
The balance of up to €21.5 million will be paid provided the divisions being bought over meet agreed profit targets under the terms of the deal now on offer.
The value of net assets transferring would be in excess of €10 million.
This offer is subject to the finalisation of the due diligence, the completion of legal documentation and board approval from the five co-ops including Bandon, Drinagh, Lisavaird, Barryroe and Dairygold.
Denis Buckley, chairman of IAWS Co-op, confirmed the board will also be recommending a share exchange later in the year. That will pave the way for the €130 million windfall to the various co-ops with stakeholdings in IAWS Co-op.
These shares relate to the equity stake IAWS Co-op holds in IAWS plc.
It was part of a commitment made last year by Mr Lynch to the shareholders in the co-op.
It will involve allocation of 11 million IAWS Group plc shares to co-op shareholders on a pro rata basis.
It follows similar exercises which were successfully completed in 1996 and 2002 when 31.1 million IAWS plc shares were passed to its members. It will reduce the co-op’s stake in IAWS plc to just 2% of the publicly quoted group, headed previously by Mr Lynch.
Confirmation of this move belies earlier reports that Mr Lynch was not going to honour this commitment.
It was speculated that his €130m investment paid to acquire 26% of NTR, which operates the toll road on the M50 and which has wind energy and waste management operations, left him short of cash.
