Australian rental giant Coates Hire has opened its books to allow potential suitors to perform due diligence two months after becoming the target of several takeover efforts. Suitors will gain access to Coates’ virtual data room beginning July 16.
Coates chairman Bill Cutbush said a formal assessment of indicative proposals will give Coates’ board a “better understanding of the value of available offers.” However, Cutbush cautioned there was no assurance that the due diligence process would lead to an acquisition.
Private equity firms Ironbridge Capital, Archer Capital and Pacific Equity Partners are among the Australian groups believed to be interested in possible offers for Coates as well as Japan’s Nikko Principal Investments and U.S.-based Kohlberg Kravis Roberts.
In the wake of the interest in the company, Coates recently began a strategic review of its options, which, Cutbush said, has inspired the Coates board to consider significant improvements to the company’s ongoing business.
“We continue to see opportunities to expand and diversify the business and to leverage the investment to the bottom line, amid ongoing positive trading conditions,” he said.
Coates recently reduced its profit forecast for fiscal 2007 because of bottlenecks at coal exporting ports on the East Coast and on rail networks. Coates said its net profit for the fiscal year could be about 5 percent lower than the $106 million forecast in February. The lower forecast has, apparently, not diffused interest in the company on the part of potential buyers.