Recall Holdings Limited Rejects Unsolicited Acquisition Proposal from Iron Mountain
December 14 2014 - 4:15PM
Business Wire
Board unanimously rejects Proposal;
Materially undervalues Recall, whose strategy is successfully
driving double-digit revenue and EBITDA growth
Recall Holdings Limited (ASX:REC), a global leader in document
storage, digital document management, secure destruction and data
protection, said today that its Board of Directors has unanimously
rejected a non-binding indicative proposal (“Proposal”)
from Iron Mountain Incorporated (NYSE: IRM) to acquire
Recall. Under the Proposal, Recall shareholders would receive a
combination of cash and Iron Mountain shares with a total value of
A$7.00 per Recall share. The Proposal is subject to a number of
conditions including due diligence, unanimous board recommendation,
exclusivity provisions and all regulatory approvals being
obtained.
The Board does not believe that the Proposal represents an
appropriate sharing of the potential value creation from the
transaction. A combination with Iron Mountain has the potential to
generate substantial synergies, estimated by Recall to be
approximately US$250 million per annum. Potential value creation
from the transaction is estimated to be in the order of US$3.9
billion, when synergies are capitalised at Iron Mountain’s trading
EV/EBITDA multiple (before implementation costs) and when Recall
earnings are also valued at Iron Mountain’s trading multiple. The
premium offered over Recall’s 12 December 2014 trading price
represents less than 5% of the total value creation, while creating
value for Iron Mountain equivalent to 49% of its current market
capitalisation.
In addition, the Proposal does not reflect the fundamental value
of Recall, particularly taking into account the strategic plan
which management has executed upon since demerger from Brambles in
December 2013. As previously announced, this strategic plan has
positioned the business to deliver FY15 revenue growth approaching
double digits and FY15 EBITDA growth at least equal to revenue
growth. A number of initiatives are underway to deliver this
revenue growth (both organically and through acquisitions) and to
continue to improve Recall’s operating margins over the medium
term.
Recall will continue to focus on aggressively growing its
business, increasing shareholder value and supporting its customers
around the globe. The company is committed to its strategic
objectives – sustainable profitable growth, operational excellence
and innovation for the future – and will continue to update
shareholders as required under its continuous disclosure
obligations.
Recall has appointed BofA Merrill Lynch and UBS AG, Australia
Branch as its financial advisers and Allens as its primary
Australian legal advisers.
About Recall
Recall is a global leader in information management solutions,
offering customers complete management of its physical and digital
information assets with one partner. Recall’s innovative solutions
empower organizations to make better business decisions throughout
the information lifecycle, while keeping regulatory compliance and
eliminating unnecessary resources, time and costs. Recall services
more than 80,000 customer accounts in over 300 dedicated operation
centers, spanning five continents in 24 countries. For more
information, please visit recall.com.
For further information:For RecallInvestor RelationsBill
Frith, +61 2 9582 0244Senior Director, Investor
RelationsBill.Frith@recall.comorMSLGROUPU.S media enquiriesDavid
Sprague or Amanda Fountain, +1
781-684-0770recall@mslgroup.comorGRACoswayAustralian media
enquiriesFleur Jouault, +61 405 669
632Directorfjouault@gracosway.com.au
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