ALS shares extend losses after acquisition spree
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More news: Shares in ALS Limited were down 2.5% to $12.74 in early trading, dropping for a second straight session, after the laboratory testing giant announced two acquisitions.
Today, ALS said it agreed to acquire US-based York Analytical Laboratories and Europe-based Wessling Holding to expand its presence in environmental testing for a total of $225 million.
The announcement comes a day after it agreed to take full control of struggling European-based contract research organisation Nuvisan.
What they said: Analysts at Macquarie have kept an 'outperform' rating on ALS post the Nuvisan decision, saying the deal structure allowed ALS to fully capture potential earnings upside from depressed levels and also preserved its funding capacity for other acquisitions.
ALS to buy US, Europe-based testing businesses for $225m
The news: Laboratory testing giant ALS Limited has agreed to acquire US-based York Analytical laboratories and Europe-based Wessling Holding to expand its presence in the two geographies.
The numbers: ALS will pay a total of $225 million for the two environmental testing businesses, with the acquisitions to contribute $195 million in full year revenues. The transactions will be funded through bank debt, which would lift the company’s gearing ratio to 2.3 times, the top end of its target range.
The context: CEO Malcolm Deane said York will accelerate ALS’ expansion into the USA environmental market, particularly in the fast emerging northeast region, while Wessling will provide an immediate pathway and operational footprint into the large German and French environmental, food and pharmaceutical markets.
The announcement comes a day after ALS announced it would acquire the balance 49% stake in European-based contract research organisation Nuvisan, with a plan to restructure operations of the troubled company over two years.
The source: ASX announcement
