MAINBOARD-LISTED investment firm GK Goh Holdings (GKGH) has proposed to sell its entire 92 per cent stake in corporate-services provider Boardroom to a Temasek-related consortium for around S$312 million.
It expects to fetch approximately S$287 million in gross proceeds from the divestment, which is more than its market cap of S$250 million as at Jan 19, 2021 – the last trading day before the announcement of a strategic review of its Boardroom shareholding, said GKGH in a bourse filing on Friday night.
The group intends to use the proceeds to repay borrowings and invest in existing and/or new businesses, assets and investment opportunities.
Apricus Global – an investment vehicle owned by the consortium comprising Temasek-linked 65 Equity Partners Holdings and private equity firm Tower Capital Asia – made the cash offer price of S$1.48828 for each Boardroom share, which values Boardroom at around S$312 million.
GKGH and Symphony House have since entered into irrevocable undertakings to accept the offer, if and when made, with respect to their 92 per cent and 7.6 per cent stakes respectively in Boardroom.
GKGH said it expects to recommend a special dividend to be paid to shareholders after the disposal has been completed; the disposal is part of its broader plans to maximise shareholder value while positioning Boardroom for “a new phase of growth”.
Following the disposal, GKGH will continue to own aged care and healthcare businesses in Australia and Singapore – via its investments in Opal Health Care, Allium Healthcare and Habitat Assets – as well as a diversified portfolio of investments across various asset classes.
These businesses and investments have an aggregate carrying value of approximately S$458.3 million as at Dec 31, 2020.
The disposal of Boardroom will be subject to GKGH shareholders’ approval at an extraordinary general meeting to be convened at a later date.
GKG Investment Holdings, which owns around 60.85 per cent in GKGH, has provided an irrevocable undertaking to GKGH to vote in favour of the disposal.
GKGH has also agreed to procure that Boardroom will not hold its existing 31.5 per cent investment in Definitiv Group, prior to completion of the disposal.
Goh Geok Khim, GKGH executive chairman, said: “Over the years, Boardroom has proven the resilience of its business model, and we are confident that its new owners will provide the resources and ambition to grow Boardroom’s businesses even further, while sustaining its focus on first-rate service quality and innovative solutions.”
Kim Teo, chief executive officer of Boardroom, said he does not foresee any change to the company’s day-to-day business operations.
Credit Suisse had acted as exclusive financial adviser to GKGH on the sale.
GKGH has been a Boardroom shareholder since 2004, and has over the past 17 years established Boardroom as a full-suite corporate services platform in the Asia-Pacific.
In July 2019, Boardroom was taken private by GKGH which offered S$0.88 in cash for each Boardroom share, a deal that valued the company at S$184.5 million.
GKGH shares last traded at S$0.975 on Thursday before it called for a trading halt on Friday.