Australian mobile distributor, Cellnet (ASX:CLT), is eyeing a majority takeover by German electronic accessory distributor, Wentronic, in a multimillion-dollar deal.
Cellnet, which publicly-listed on the Australian Securities Exchange (ASX), told shareholders on November 11 that it had entered an agreement for Wentronic Holding to make an off-market takeover bid for 83 per cent of the shares in the company.
The Queensland-based electronics distribution, warehousing, and logistics company counts Optus, Vodafone, Telstra, JB Hi-Fi, and Officeworks among the partners to whom it distributes products from Lexar, Otter, Lifeproof, and Plantronics, among other brands.
The proposed deal with the German distributor values Cellnet at about $14.6 million, with shareholders offered $0.28 per share. Under the offer, Wentronic would need to pay Cellnet shareholders up to $12.26 million.
The takeover proposal follows a trading halt that the company entered into on November 9, pending the announcement.
Wentronic is a privately-owned company incorporated in Braunschweing, Germany. The company and its subsidiaries have around 200 employees, and branches in Hong Kong, China, the UK, and Italy.
The German company is an electronic accessories distributor, and sells its portfolio of electronic products to wholesalers, mail order dealers, online retailers, and conventional retailers, as well as industrial companies throughout Europe and further afield.
Cellnet told shareholders that if the deal goes ahead, it will be able to leverage the relationships that Wentronic has globally to sell its own products, including its 3SIXT brand, and access new markets, while also serving existing customers more effectively.
Wentronic also expects that a closer alignment between itself and Cellnet will provide the local company with the opportunity to increase the volume and range of products it sells, and further diversify its distribution channels.
Cellnet said that its largest shareholder, CVC, is expected to accept the offer, in the absence of a better deal. The offer is slated to close on December 21.
The announcement follows a year of “tough trading conditions” for Cellnet, with the company indicating it was impacted by the closure of Dick Smith Electronics, one of its trading partners, earlier in the year.
During the financial year ending June 2016, the company reported a fall in revenue, to $75.15 million, while also reporting a six per cent rise in profit after tax, to $1.75 million.
The company also said Wentronic proposes to nominate Michael Wendt, Brian Danos, Kevin
Gilmore, Alan Sparks, and Michael Reddie to the Cellnet board.
At the time of writing, the company’s share price stood at $0.26.