The board of Coffey International has recommended that its shareholders accept an offer made by Tetra Tech to acquire the business.
Under the deal shareholders have been offered AUS$0.425 (£0.2) per share, which represents a 173% premium on the average price of Coffey shares in the last six months.
News of the takeover bid came as Coffey announced that revenue generated by its geoservices business in the last three months was AUS$38M (£18M), compared to AUS$53M (£25M) for the same period last year. Nonetheless Coffey managing director John Douglas said: “With a record amount of contracted work for our international development business, and the continuing success of project management, we have a substantial pipeline of work on which to build the business.”
Speaking about the proposed buyout, 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.”
Coffey shareholders are expected to receive formal notification of the proposed buyout in November.