Johns Lyng’s $1.1B Scheme Faces Regulatory and Shareholder Hurdles Ahead

Deal Overview

Johns Lyng Group Limited (ASX – JLG), a prominent player in the building services sector across Australia, New Zealand, and the United States, has formalised a scheme implementation deed with Pacific Equity Partners (PEP) for a full acquisition. The agreed scheme consideration is $4.00 per share, valuing JLG’s equity at approximately $1.1 billion and the enterprise value at $1.3 billion. This price represents a substantial 77% premium to JLG’s closing share price prior to the offer announcement, underscoring the attractiveness of the bid.

The transaction implies an enterprise value to EBITDA multiple of 10.3 times on a post-accounting standard basis, reflecting a valuation that investors will find compelling given JLG’s recent business momentum and underlying performance.

Shareholder and Board Support

The independent board committee of JLG, comprising non-executive directors, has unanimously recommended shareholders vote in favour of the scheme, subject to the absence of a superior proposal and the independent expert’s confirmation that the transaction is in shareholders’ best interests. Notably, Scott Didier, JLG’s managing director and largest shareholder with a 17.64% stake, has entered into a cooperation deed with PEP, committing to vote in favour of the scheme and to support the transaction through to completion.

The scheme consideration offers shareholders the option to receive either full cash consideration or a combination of cash and scrip in the bidder’s holding company, Sherwood TopCo Ltd, providing flexibility for investors depending on their preferences.

Conditions and Timetable

The scheme is subject to customary conditions precedent, including shareholder approval at meetings expected to be held in October 2025, court approval, and regulatory consents from bodies such as ASIC, ASX, FIRB, and relevant US authorities. The transaction is also contingent on no material adverse changes occurring before completion.

Assuming all conditions are met, the implementation of the scheme is targeted for November 2025, with JLG expected to be delisted from the ASX shortly thereafter.

Exclusivity and Break Fee

As part of the agreement, JLG has granted exclusivity to PEP, agreeing not to solicit or engage with competing proposals during the exclusivity period. A break fee of $11 million is payable to PEP under certain circumstances, such as if a competing proposal succeeds or if the JLG board changes its recommendation without a superior proposal emerging.

Strategic Implications

PEP’s managing director highlighted the strength of JLG’s integrated building services operations and expressed confidence in supporting the company’s future growth. For JLG shareholders, the offer represents a significant premium and an opportunity to realise value in a transaction backed by a reputable private equity firm.

Investors will be watching closely as the scheme progresses through regulatory and shareholder approvals, mindful of the potential for competing bids or changes in market conditions that could influence the outcome.