IAWS Co-op to convert to a plc and complete part-takeover of SWS
The deal involving the Bandon-based SWS group, for which the co-op offered €42.5m up front, to be followed by earn-outs of over €26m over the following three years, is expected to conclude in late summer.
The co-op board meets in July to change its status to a publicly limited company, breaking from the structure it took when it was set up in 1897.
That will pave the way for the group’s shares to be traded on a grey market, which Mr Lynch said could happen any time between September of this year and June 2006.
Before the flotation, the group has to complete due diligence on SWS. IAWS wants to buy the company’s waste management, energy divisions and back office operations.
The process has been dragging on but Mr Lynch said he was not under any pressure to get the deal signed off. “There’s just due diligence being completed now by their various businesses and I would hope this will be completed by the end of August or maybe the end of July, depending on how quickly all this gets done.”
On the future outlook for SWS staff, Mr Lynch said that, in the past, he has created jobs and that this would also happen in the case of SWS. When asked whether he would retain SWS’s existing management, with whom he was reported to have exchanged sharp words during the course of the negotiations to buy the company, Mr Lynch replied: “Absolutely.”
Mr Lynch, former chief executive of IAWS plc, has a strong track record with the convenience food group, which has been top of the best-performing food stocks over 10 years.
On future funding, Mr Lynch said he saw no problems raising the levels of cash required to drive the combined fortunes of IAWS Co-op and SWS forward. After the conversion to a public limited company “we can borrow all the money we want because we have good projects. When we get member approval to convert we will have the wherewithal to raise capital.”
Last week the co-op ended its links with IAWS plc, when it sold off a million shares that raised €12 million.
The co-op still has a further 11 million shares in the plc, which represent almost 9% of the company. It is expected to distribute these shares among its own shareholders in the coming months.
