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Ebos backs off British purchase, evaluates "significant" Australasian asset

Tuesday 25th October 2011

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Pharmaceuticals and medical supplies distributor Ebos Group backed away from an acquisition in Britain because of deteriorating market conditions in Europe but is currently evaluating another “significant” Australasian purchase.

Ebos managing director Mark Waller told the annual shareholders' meeting last Thursday he expects many multinational healthcare companies “will be forced to exit their expensive Australian subsidiaries,” creating opportunities for Ebos.

Waller's speech and that of chairman Rick Christie weren't posted on the NZX until today.

In a report published on last Friday, Waller said the proposed British purchase would have cost between $80 million and $90 million and that the “New Zealand/Australian centric” opportunity the company is currently evaluating is even bigger.

This information wasn't in the speeches posted by NZX. Section 10 of the NZX listing rules requires all listed companies to release “any material information” to NZX first before telling any other parties.

Waller did not immediately respond to phone calls.

Christie's speech said Ebos had nearly $100 million in cash at June 30 and insignificant debt.

He said business conditions “remain competitive and rugged.

“Intuitively, one would think that in tough economic times, there would be any number of distressed companies out there just waiting for new owners to inject new capital and new life into them,” Christie said.

While Ebos has looked at a number of such companies, it doesn't want to buy something it would take years and millions of dollars to put on a sound footing, he said.

Ebos shares are 4 cents higher at $6.60, up from its $6.30 low in August but well down from its 12 month high at $7.80 in December last year.


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