JLG shareholders offered $4.00 cash per share in $1.1 billion acquisition by Pacific Equity Partners-backed Bidder

Background and Transaction Overview

Johns Lyng Group Limited (JLG), a leading integrated building services provider operating across Australia, New Zealand, and the United States, has entered into a definitive scheme of arrangement with Sherwood BidCo Pty Ltd (Bidder), an entity ultimately owned and controlled by funds managed by Pacific Equity Partners (PEP). Under this arrangement, Bidder proposes to acquire 100% of the issued shares of JLG.

The scheme booklet, recently registered with the Australian Securities and Investments Commission (ASIC), details the terms of the proposed acquisition. JLG shareholders will receive $4.00 cash per share, a substantial premium to recent trading prices, with relevant shareholders; primarily management and employees; offered the option to receive scrip consideration in the form of shares in Bidder's ultimate holding company, Sherwood TopCo Ltd (Topco).

Valuation and Expert Opinion

The cash consideration of $4.00 per share values JLG's equity at approximately $1.1 billion, representing a premium of 77% to the closing share price prior to the receipt of PEP's indicative offer. This premium is well above typical market transaction premiums, reflecting both a control premium and the strategic value of JLG's market position.

Kroll Australia Pty Ltd, the Independent Expert appointed by the JLG Board, has concluded that the scheme is fair and reasonable and in the best interests of general JLG shareholders, absent a superior proposal. While the expert has not opined on the position of relevant shareholders who may elect scrip consideration, it logically follows that those receiving only cash consideration are in the same position as general shareholders.

Director Recommendations and Voting Process

The Independent Directors of JLG unanimously recommend that shareholders vote in favor of the scheme, subject to the Independent Expert maintaining its positive opinion and the absence of a superior proposal. Executive Directors Scott Didier and Nick Carnell, who collectively hold approximately 18.6% of shares, also support the scheme and intend to vote their shares in favor.

Shareholders will vote at two separate meetings on 8 October 2025, the General Scheme Meeting for general shareholders and the Relevant Shareholder Scheme Meeting for management and employee shareholders. Approval requires a majority in number and at least 75% of votes cast at each meeting. Following shareholder approval, the scheme requires court sanction, with the second court hearing scheduled for 13 October 2025.

Post-Acquisition Intentions and Risks

Bidder intends to maintain JLG's business operations largely as they are, supporting organic and acquisition-driven growth opportunities. JLG will be delisted from the ASX after the scheme implementation.

Relevant shareholders electing scrip consideration will receive shares in Topco, an unlisted holding company, subject to certain restrictions and governance arrangements detailed in the Topco Shareholders’ Deed. These shares carry risks including illiquidity and limited information compared to listed shares.

Risks to shareholders include the possibility that conditions precedent may not be satisfied, potential delays in court approval, and operational risks inherent in JLG’s business. Shareholders should also consider tax implications and the limited liquidity of scrip consideration.

Next Steps for Shareholders

JLG shareholders are urged to carefully review the scheme booklet and consider the Independent Expert’s report before voting. The scheme provides a clear exit opportunity at a premium valuation, but shareholders should weigh this against the risks and their individual circumstances.

Voting instructions and proxy forms have been distributed, with electronic and physical options available. Shareholders who do not vote or vote against the scheme will still be bound by its outcome if approved by the requisite majorities and the court.