The Board of Coffey International Limited (ASX:COF) is pleased to announce that it has entered into a Bid Implementation Agreement (“BIA”) with Tetra Tech, Inc. (NASDAQ:TTEK) under which Tetra Tech has agreed that it, or its nominee, will make an off-market takeover offer for 100% of the Coffey shares on issue (the “Offer”).

The Offer

Under the terms of the Offer, Coffey shareholders will receive A$0.425 cash per share (“Offer Price”), which represents:

  • A 130% premium to Coffey’s last closing price of $0.185 on 14 October 2015 (being the last trading day prior to this announcement)
  • A 148% premium to the 1 month volume weighted average price¹ of Coffey shares
  • A 173% premium to the 6 month volume weighted average price² of Coffey shares

The Offer, governed by the BIA, will be conditional upon the satisfaction of certain customary conditions. These conditions include that Tetra Tech acquire a relevant interest in at least 90% of Coffey’s shares on issue.

The BIA outlines the key terms and conditions of the Offer and can be found attached to this announcement. The BIA also includes customary deal protection mechanisms, including a break fee of $1.5 million payable to Tetra Tech in certain circumstances as well as exclusivity provisions.

Coffey Chairman John Mulcahy welcomed the offer.

“Tetra Tech’s offer represents better value for shareholders than the market has been prepared to pay because it delivers strong operational benefits for Tetra Tech,” Mr Mulcahy said.

“On all indications available to us, it represents superior value to what we can foresee, over a realistic timeframe, from continuing as a standalone business.

“While this is a valuable opportunity for shareholders it is also very beneficial for the highly talented Coffey team of employees who should see enhanced career opportunities as part of a combined Tetra Tech and Coffey global business.

“We are very confident that Tetra Tech’s offer will deliver benefits for all Coffey stakeholders, including shareholders, employees and clients.”

Tetra Tech Chairman and CEO Dan Batrack said: “Tetra Tech is pleased to have reached agreement on a recommended transaction to be put to Coffey’s shareholders.

“Coffey not only expands Tetra Tech’s geographic presence, but provides a platform for growth of our international development business with multinational aid agencies.

“In addition to Coffey’s expertise in geoservices and project management, the combined company will also provide water and environmental services to support Australia’s infrastructure expansion.

Together, we will be able to provide an expanded scope of services to our customers and offer our combined staff even greater professional opportunities.”

Unanimous recommendation by the Coffey Board

The Directors of Coffey have carefully considered the Tetra Tech Offer with the assistance of their advisors and will unanimously recommend that Coffey shareholders accept the Offer, subject to there being no superior proposal.

The Directors will accept or procure the acceptance of Tetra Tech’s Offer in respect of any shares in Coffey that they, or their associates, own or control or otherwise have a relevant interest in, subject to there being no superior proposal.

Timetable

Coffey shareholders do not need to take any action at this present time. As set out in the BIA, it is currently expected that Tetra Tech’s Bidder Statement and Coffey’s Target Statement will be jointly dispatched to Coffey shareholders in November 2015.

Shareholder information

Further information on the Offer will be lodged with ASX in due course and included on Coffey’s website at coffey.com.

Coffey has retained Gresham Advisory Partners Limited as financial adviser and Norton Rose Fulbright as legal adviser.

Tetra Tech has retained ANZ Corporate Advisory as financial adviser and Thomson Geer as legal adviser.

1. 1 month volume weighted average price at 14 October 2015 of $0.172
2. 6 month volume weighted average price at 14 October 2015 of $0.156