MHM Automation - MHM

[Walter]

Another company where the legacy throws shade on the current business. Steady progress with the possibility of a bonus price spike if their hospital equipment ever makes it to market.

[nztx]

A bit of a run upwards recently before it abruptly stopped in its tracks

The newer bolt ons seem to be the star performers .. forget the old old maybe whatevers which probably
should have been shut down a decade or two back or sold off for whatever they could liquidate out of
them :)

Lets not forget some of the real estate has been liquidated at a gain to give rise to a recent dividend,
still plenty of losses forward and not a smell imputation credit in sight still, if not mistaken

[nztx]

Oh Look - Another Bolt-on addition announced

Wonder if there is any surplus land or buildings in the new bundle that can be hocked off to cover another special dividend ? ;)

https://www.nzx.com/announcements/404465

MHM Automation conditional agreement to acquire Wyma


MHM Automation Limited announces conditional agreement to acquire Wyma Engineering Limited

MHM Automation Limited (MHM) is pleased to announce that it has signed a conditional agreement to acquire all of the shares in Wyma Engineering (NZ) Limited (Wyma).

Wyma is a world leading manufacturer of post-harvest vegetable and fruit handling equipment. It is based in Christchurch NZ, with operations in Europe and the UK. Wyma is majority owned by interests related to Andrew and Angela Barclay.

The acquisition potentially values the Wyma business at $60m (5.5x-6x EBITDA multiple) and will be structured as follows:

•Issue of 22.67m new shares in MHM (representing 25.46% post transaction) to Barclay interests
•Initial cash payment of $28m
•Earnout of $15m over three years

This structure aligns the interests of all parties, and the businesses will be merged over time.
MHM is pleased to welcome the Barclays as a new cornerstone shareholder and Andrew will join the MHM board. MHM’s two largest shareholders who own over 40% of the company, have supported the transaction.

The transaction is conditional upon shareholder approval, finance and final due diligence. No dates have yet been set for satisfaction of these conditions precedent.

Settlement date is targeted for 1 April 2023.

MHM will provide a detailed update on the transaction, timing and shareholder approval process upon release of our half year financials in February.

Richard Rookes, CEO of MHM said “we are pleased to be joining forces with Wyma. It is a continuation of our growth strategy, providing further scale and diversification into new regions and sectors. The businesses are culturally aligned and we look forward to merging our businesses together to continue to provide our customers with world leading automated solutions”.

Andrew Barclay, MD of Wyma said “Both companies are world leaders in the Agri-tech space, with significant offshore sales. This transaction provides operational and growth synergies for both Wyma and MHM. Staff will have opportunities to grow within a larger business, while customers will benefit from a more diverse and complete offering”.

We look forward to providing further updates as we move through the process towards settlement.




the acquisition trail is consistent to similar strategy 22 + years ago under a former name before recent nameplates
past 2000 were dreamt up :)

Any reasonable dividends look to be more distant as a further 22.67 m shares get spat out to cover this add-on :)

wonder where the initial cash deposit of $28 m is coming from ? ;)

(Anyone see a fleet of well laden wheelbarrows heading out of a Canterbury bank recently or being prepared
for action ? )

[blackcap]

The market really seems to like it. That's good for me because I bought some about 2 months ago in the low 60's.

I visited this company a year ago, spoke with the CEO and CFO and liked what I saw/heard.

[nztx]

The market really seems to like it. That's good for me because I bought some about 2 months ago in the low 60's.

I visited this company a year ago, spoke with the CEO and CFO and liked what I saw/heard.


Let's hope it's the bolt on they have looked for across more than 25 years.

The others have mostly not delivered well resulting in carnage over the years

In times of strong economic headwinds, any acquisition would have to be very sturdy indeed
against the risks, leveraging and finance costs taken onboard.

In times of lenders putting things through the finest microscope they can find, and
then leverage commanding highest top dollar usary rates, the ship needs to be
very seaworthy, otherwise it simply doesn't leave

[Czechmate]

Had a fair bit to do with Wyma when I was living in Czech they are a well respected operator in their space.

Always difficult to succeed away from home, no matter how good your proposition, but as a Kiwi I was very proud that this was another innovative Kiwi company showing our flag.

Andrew Barclay should be a great plus for the company.

[sunnysleeper11]

The market really seems to like it. That's good for me because I bought some about 2 months ago in the low 60's.

I visited this company a year ago, spoke with the CEO and CFO and liked what I saw/heard.

Will they go for a cap-raise for the $28m do you think?

[blackcap]

Will they go for a cap-raise for the $28m do you think?

I have no idea. It was a year ago I spoke with the company around their annual results 21. Not sure this addition was even in the picture then.

[nztx]

Looks like the bubble has burst :)

[nztx]

https://www.nzherald.co.nz/business/russia-ukraine-war-desperate-plea-for-help-over-2023-ukraine-grain-harvest-declined-by-foreign-minister-nanaia-mahuta/6K3T2RSHAFG3PCYHOZ2O4PEG6I/



Russia-Ukraine war: NZ Foreign Minister Nanaia Mahuta declines plea for help over grain harvest


Lost Sales into Europe at MAHUTA's hands - by look of things ? ;)

[GTM 3442]

https://www.nzherald.co.nz/business/russia-ukraine-war-desperate-plea-for-help-over-2023-ukraine-grain-harvest-declined-by-foreign-minister-nanaia-mahuta/6K3T2RSHAFG3PCYHOZ2O4PEG6I/



Russia-Ukraine war: NZ Foreign Minister Nanaia Mahuta declines plea for help over grain harvest


Lost Sales into Europe at MAHUTA's hands - by look of things ? ;)

Your link's paywalled. Here's one that isn't. . .

https://www.nzherald.co.nz/nz/russia-ukraine-war-prime-minister-defends-declined-plea-for-help-over-grain-harvest-says-there-are-processes-to-follow/VBMVRY4PQBATVAFPSKEMRNC7GM/

[nztx]

Your link's paywalled. Here's one that isn't. . .

https://www.nzherald.co.nz/nz/russia-ukraine-war-prime-minister-defends-declined-plea-for-help-over-grain-harvest-says-there-are-processes-to-follow/VBMVRY4PQBATVAFPSKEMRNC7GM/


Thanks - hopefully one of the loyal Hipkins devotees will recommend a cheque be sent your way for finding that :)

[GTM 3442]

Thanks - hopefully one of the loyal Hipkins devotees will recommend a cheque be sent your way for finding that :)

A cheque? A cheque? In 21st century New Zealand? Come on!

[nztx]

A cheque? A cheque? In 21st century New Zealand? Come on!


Hipkins apparently still writes them :)

[GTM 3442]

Hipkins apparently still writes them :)

And I suppose Mister Grant still cashes them?

[nztx]

And I suppose Mister Grant still cashes them?


Probably only the really ORR-SOME ones drawn on the bank of Adrian RB

[Sideshow Bob]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/409936/392617.pdf

Colin Neal selling down. Probably bought those about 20-25c??

[winner69]

MHM seem to be doing well

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/415317/399176.pdf

[sunnysleeper11]

A persistent endless seller at around .90 for this company

[Sideshow Bob]

https://www.nzx.com/announcements/417329

MHM Automation (NZX: MHM) are today releasing preliminary full year results for the year ended 30 June 2023.
The 2023 financial year saw record results across the MHM business, with revenue growth of 43% to $96.7m and EBITDA growth of 107% to $9.87m. We also completed the acquisition of Wyma Engineering which is transformational for the group providing us with further scale and diversification.

Highlights of the 2023 financial year:

• Strong health and safety record with zero LTI’s on a 12-month
trailing basis
• 43% revenue growth to $96.7 million for the year
• 107% increase in operating EBITDA to $9.87 million
• Increased EBITDA margin to 10.2%
• Acquisition of Wyma Engineering settled on 1 May 2023
• The delivery of several large projects for our customers
• Effectively achieving our STEP 100 strategy launched in 2021
• 50% organic revenue growth in Automation (excluding Wyma) of
$70.6 million

[black knat]

https://www.nzx.com/announcements/417329

MHM Automation (NZX: MHM) are today releasing preliminary full year results for the year ended 30 June 2023.
The 2023 financial year saw record results across the MHM business, with revenue growth of 43% to $96.7m and EBITDA growth of 107% to $9.87m. We also completed the acquisition of Wyma Engineering which is transformational for the group providing us with further scale and diversification.

Highlights of the 2023 financial year:

• Strong health and safety record with zero LTI’s on a 12-month
trailing basis
• 43% revenue growth to $96.7 million for the year
• 107% increase in operating EBITDA to $9.87 million
• Increased EBITDA margin to 10.2%
• Acquisition of Wyma Engineering settled on 1 May 2023
• The delivery of several large projects for our customers
• Effectively achieving our STEP 100 strategy launched in 2021
• 50% organic revenue growth in Automation (excluding Wyma) of
$70.6 million

Excellent! $90m market cap looks cheap.

[blackcap]

Excellent! $90m market cap looks cheap.

Cashflows also look fantastic considering inventory went up by $12m.

It would be interesting to see what that impairment of $4.5m is all about....

On the face of things, looks like a very good result.

[nztx]

Cashflows also look fantastic considering inventory went up by $12m.

It would be interesting to see what that impairment of $4.5m is all about....

On the face of things, looks like a very good result.


Considering they made NPAT of $3.9m in latest period - how did inventory go up by $12m ?

How was this inventory increase funded or paid for ?

Was some work in progress or some part added out of the acquisition ?

For as long as I can recollect this outfit have been fairly light on working capital

The first distribution for donkeys years was from surplus out of sale of the Taranaki property if not mistaken.



Anyone noticed that NTA has gone from +9.3cps in prior period 2022 to minus -8.5cps at 30 Jun 2023 ?

and that's after impairment write off

[winner69]

Big pay day coming up …$1.70 a share

Mercer / MHM finally reward shareholders

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/420985/406370.pdf

[percy]

Big pay day coming up …$1.70 a share

Mercer / MHM finally reward shareholders

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/420985/406370.pdf

That's incredible....
The big Wyma earnout up to $15 million over three years put me off investing in them.Wrong yet again..lol.

[Sideshow Bob]

Had Colin Neal sold out?

Still probably did pretty well. Bought in in 2020 so probably only paid in the $0.20's.

[winner69]

That's incredible....

135 years in business

Been listed since the 1950’s

Now this

Gone from NZX forever

Will be missed

[percy]

135 years in business

Been listed since the 1950’s

Now this

Gone from NZX forever

Will be missed

You must never have owned any of their shares...lol

[blackcap]

Wow, bought in last year at 63 or so. Just liked the growth prospects and fundamentals. Well done shareholders.

[winner69]

I am up for it next time I am in Auckland.!
Does Mistress X still do out calls?

Mercer seemed to bring out the bad side of investors

[percy]

Wow, bought in last year at 63 or so. Just liked the growth prospects and fundamentals. Well done shareholders.

Well done..

[Sideshow Bob]

Wow, bought in last year at 63 or so. Just liked the growth prospects and fundamentals. Well done shareholders.

Nice one Blackcap! :)

[blackcap]

Nice one Blackcap! :)

Thanks, almost sold out a while back in the 90's. Don't always get them right though.

[Snoopy]

Big pay day coming up …$1.70 a share

Mercer / MHM finally reward shareholders

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/420985/406370.pdf


I don't follow this share closely. I am aware they have transformed from low tech Mercer Stainless into a company with a portfolio of automated technical solutions to offer. I see it was only in May they acquired 'Wyma'"
"A world leader in the design and manufacture of post harvest vegetable and fruit handling equipment. Wyma is based in Christchurch (where it has recently moved into a new state of the art manufacturing facility), with operations in Australia, UK and Czech Republic." Value was $60m.
I also remember the 'blood out of a stone' commentary about getting dividends from MHM!

That circa '85% above closing price' offer of $1.70 certainly made me sit up and take notice too. Good for shareholders, except those who bought in 10 years ago when the share price peaked at over 4 bucks! I don't like that a 'scheme of arrangement' offer has appeared, to get around putting up a straight takeover bid. A SOA needs 75% share acceptance to go through verses 90% for a takeover. I see the former owner of Wyma, Andrew Barclay, now has a 22.6% shareholding in MHM. It looks like the acceptance of any deal or not, even a SOA, could fall to how Andrew plays his cards. Pre-market buy offer is only 95c. Does that mean punters do not see much chance of this deal going through?

SNOOPY

discl: Never held, but thought about acquiring a few shares over the last year. What is the offer on the table for 'thought acquisitions'?

[blackcap]

I don't follow this share closely. I am aware they have transformed from low tech Mercer Stainless into a company with a portfolio of automated technical solutions to offer. I see it was only in May they acquired 'Wyma'"
"A world leader in the design and manufacture of post harvest vegetable and fruit handling equipment. Wyma is based in Christchurch (where it has recently moved into a new state of the art manufacturing facility), with operations in Australia, UK and Czech Republic." Value was $60m.
I also remember the 'blood out of a stone' commentary about getting dividends from MHM!

That circa '85% above closing price' offer of $1.70 certainly made me sit up and take notice too. Good for shareholders, except those who bought in 10 years ago when the share price peaked at over 4 bucks! I don't like that a 'scheme of arrangement' offer has appeared, to get around putting up a straight takeover bid. A SOA needs 75% share acceptance to go through verses 90% for a takeover. I see the former owner of Wyma, Andrew Barclay, now has a 22.6% shareholding in MHM. It looks like the acceptance of any deal or not, even a SOA, could fall to how Andrew plays his cards. Pre-market buy offer is only 95c. Does that mean punters do not see much chance of this deal going through?

SNOOPY

discl: Never held, but thought about acquiring a few shares over the last year. What is the offer on the table for 'thought acquisitions'?

Agree with you Snoopy, that schemes of arrangement are an inferior means to shareholders for takeover type offers.

Although I am happy with my position, it is tempered with the knowledge that the NZX is dying a slow death and does not have long to go if this continues.

P.s Bid is now $1.20, no offers. I think this will trade close to $1.70, the arbers will be in there.

[GTM 3442]

I am bl**dy annoyed (again) that I am geing compulsorily bought out of a New Zealand technology company as it vanishes into overseas ownership. I was happy to buy in at $0.65/odd, happy to see the price hit $0.90/odd, now I'm sad to see the NZX shrink, and bl**dy annoyed to be bought out - even at $1.70.

[blackcap]

I am bl**dy annoyed (again) that I am geing compulsorily bought out of a New Zealand technology company as it vanishes into overseas ownership. I was happy to buy in at $0.65/odd, happy to see the price hit $0.90/odd, now I'm sad to see the NZX shrink, and bl**dy annoyed to be bought out - even at $1.70.

You can always vote against. Going to be a hard sell I think to most shareholders though. The premium is so large. Like you I bought in about 2 years ago mid 60's. I had spoken to the CEO and CFO and really liked their prospects and fundamentals. I think the growth opportunity is phenomenal. Possibly $1.70 is still too cheap....

[Snoopy]

P.s Bid is now $1.20, no offers. I think this will trade close to $1.70, the arbers will be in there.


Another pre-market update. Bidder at $1.58. Seller at $2

SNOOPY

[Sideshow Bob]

One small trade through at $1.58.

100,000 on offer at $1.64....

[Snoopy]

A SOA needs 75% share acceptance to go through verses 90% for a takeover. I see the former owner of Wyma, Andrew Barclay, now has a 22.6% shareholding in MHM. It looks like the acceptance of any deal or not, even a SOA, could fall to how Andrew plays his cards.


Question answered. Barclay has folded.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/421030/406418.pdf

SNOOPY

[nztx]

Mercer seemed to bring out the bad side of investors


How many dividends did they pay ?

I remember these being under 30c, but didn't see this coming ;)

If I still had some, I would take the money & run very very fast :)

[nztx]

https://www.nzx.com/announcements/420985

BACKGROUND


In September 2023, MHM received a confidential, non-binding and conditional letter of intention from Bettcher for the potential acquisition of all of the shares in MHM.


Was the Market kept informed that there was potentially something happening which may affect share values back in September ? ;)


https://www.nzx.com/companies/MHM/announcements

[GTM 3442]

https://www.nzx.com/announcements/420985

BACKGROUND




Was the Market kept informed that there was potentially something happening which may affect share values back in September ? ;)


https://www.nzx.com/companies/MHM/announcements


Do as I say not as I do. . . or is that do as I do not as I say. . .


https://mhmautomation.com/data/files/corporate-governance/230823_MHM_Takeover-Protocol.pdf

[nztx]

Do as I say not as I do. . . or is that do as I do not as I say. . .


https://mhmautomation.com/data/files/corporate-governance/230823_MHM_Takeover-Protocol.pdf



Is there something hidden between the lines .. along the lines of "take the money and run" ?

Interestingly, the dust from the Wyma merger had hardly had chance to settle, it appears :)

Perhaps the foreground blinded someone on the backgound needing more attention ..



Even the Sep 2023 FINAL Divie got missed & on better results too .. maybe we know why now :)

https://www.nzx.com/announcements/418331


It all looks very nice and transparent with continuous reporting of all and material matters to keep the Market informed, or does it ? ;)

[GTM 3442]

I don't know if it's a case of reading between the lines. I think it's a case of squinting between the brackets.

From Protocol B (referenced above)

"4. REVIEW
The board is responsible for reviewing these Takeover Protocols and any amendments to them.
These Protocols were adopted on [insert date] 2023."

[nztx]

This Outfit have certainly kept things Confidential for 4-6 weeks or so .. to point of not keeping the Market
informed that something had been received and was afoot until today with their NZX Announcement


Where does this place them in respect of NZX Listing Rules & secondly the Scheme of Arrangement, or
more accurately "Buy Out" scheme they have announced today ? ;)

[GTM 3442]

This Outfit have certainly kept things Confidential for 4-6 weeks or so .. to point of not keeping the Market
informed that something had been received and was afoot until today with their NZX Announcement


Where does this place them in respect of NZX Listing Rules & secondly the Scheme of Arrangement, or
more accurately "Buy Out" scheme they have announced today ? ;)

I'm not sure, but it stirs dim recollections of Doug Myers having a brainwave and flogging Lion to the Japanese between morning tea and lunchtime one fine spring day.

[Sideshow Bob]

https://www.nzx.com/announcements/423431

MHM Automation Limited (MHM) has today been issued with initial orders from the High Court (Initial Orders) in relation to its proposed scheme of arrangement with Bettcher Industries, Inc. (Bettcher) pursuant to which it is proposed that Bettcher, through its New Zealand incorporated wholly-owned subsidiary, Merlin NZD Bidco Limited, will acquire 100% of the shares in MHM for cash consideration of NZ$1.70 per share (Scheme).

Pursuant to the Initial Orders, among other things, MHM is required to hold a meeting of shareholders to seek shareholder approval of the Scheme. MHM is now in the process of organising a special meeting of shareholders at which approval of the Scheme will be sought (Scheme Meeting).

The Scheme Meeting is expected to be held in January 2024 and formal notice of meeting and certain other materials will be sent to shareholders in due course.

If shareholders approve the Scheme at the Scheme Meeting, MHM will seek that the High Court grant final orders approving the Scheme.
Attached to this announcement is a copy of the Initial Orders.

[nztx]

Almost Good Bye Nurse for a handful of bucks on this one

[fastbike]

The slurping sound of management and the board can be heard ...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/425838/412174.pdf



Pursuant to a deed poll dated 7 February 2024, MHM accelerated the vesting date of the Tranche 3
Options to 27 February 2024, being the business day immediately preceding the Record Date (as
that term is defined in the SIA). It is intended that, following receipt by MHM of exercise notices
from each of the Option Holders, the Tranche 3 Options will be converted into 300,000 ordinary
shares (in aggregate) and issued to the Option Holders (100,000 ordinary shares to Ian and
200,000 ordinary shares to Richard) on 27 February 2024.

[nztx]

The slurping sound of management and the board can be heard ...

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MHM/425838/412174.pdf

The same Board who got this waiver to keep Holders in the dark ? ;)

https://www.nzx.com/announcements/424720


As set out in NZ RegCo's Decision announced to the market today, the waiver relieves MHM from its obligation to release a Results Announcement for the financial half year ending 31 December 2023, subject to the scheme of arrangement in respect of MHM (as initially announced via NZX on 3 November 2023) (Scheme) being implemented, and MHM being delisted from the NZX Main Board, prior to 29 March 2024. The result of the waiver is that, provided the Scheme is implemented, and MHM delisted, prior to 29 March 2024, MHM's shareholders will not receive the financial half year results for the 6-month period ending 31 December 2023.


Pretty transparent on the Info ;)