McMillan Shakespeare Limited (ASX:MMS) entered into a scheme implementation agreement to acquire Eclipx Group Limited (ASX:ECX) for approximately AUD 910 million on November 8, 2018. As part of consideration, Eclipx Group Limited (Eclipx) shareholders are to receive 0.1414 McMillan Shakespeare Limited (MMS or McMillan) shares plus AUD 46 cents cash for each Eclipx share held. Upon completion of the transaction, existing MMS shareholders will own approximately 64% of the combined group and Eclipx shareholders will hold the remaining approximately 36%. Both the parties agreed to a break-fee of AUD 7.26 million under certain scenarios.

MMS Board has been expanded to include three Eclipx directors. MMS Chief Executive Officer and Chief Financial Officer, Mike Salisbury and Mark Blackburn, will continue as Chief Executive Officer and Chief Financial Officer of the combined group. Senior management of both McMillan and Eclipx agreed to participate as Executives of the combined group. The transaction is subject to an independent expert concluding that the merger is in the best interests of the Eclipx shareholders, court's approval on the scheme and certain regulatory approvals including approval from the ACCC. The transaction will be put to Eclipx shareholders in early 2019 (likely in February 2019) for approval and is unanimously recommended by the Board of Eclipx. The Directors of Eclipx intend to vote all Eclipx shares held or controlled by them in favor of the agreement. The scheme is expected to be implemented on March 13, 2019. McMillan anticipates delivering EBITDA run-rate synergies of AUD 50 million per annum following integration, before implementation and transaction costs and expects the transaction to be EPS accretive pre synergies. The agreement requires both the parties to form a transaction implementation committee as soon as possible, comprising of Chief Executive Officers, legal and financial advisors of both the parties and others, when required.

Deutsche Bank AG, Sydney Branch is acting as financial adviser while King & Wood Mallesons is acting as legal adviser to McMillan Shakespeare Limited. UBS AG, Australia Branch is acting as financial adviser while Herbert Smith Freehills is acting as legal adviser to Eclipx Group Limited. Ernst & Young Oceania Limited acted as legal advisor for McMillan Shakespeare.

McMillan Shakespeare Limited (ASX:MMS) cancelled the acquisition of Eclipx Group Limited (ASX:ECX) on March 20, 2019. The transaction was terminated because both the parties were unable to reach an agreement on the terms of scheme and McMillan Shakespeare Limited refused to accept the request of Eclipx Group Limited to extend the time for further negotiation regarding terms of the scheme.