Johns Lyng's Fall From Grace Ends in a $1.1 Billion Takeover

Fund managers say insider buying signalled a turning point before Pacific Equity Partners' takeover crystallised the recovery

30 Jun 2026 · 4 min read

Building restoration specialist Johns Lyng Group went from market darling to earnings disappointment to takeover target within about three years, delivering some of its best returns to fund managers only after its share price had fallen furthest.

From a crowded favourite to a forced sell-off

Tamim Funds Management's September 2025 retrospective captured the arc: for years, Johns Lyng was a classic fund manager favourite, priced to perfection, and Tamim simply couldn't justify the premium despite admiring the business. As the market soured on small caps and the company cycled through weaker industry activity following a period of unusually high storm and weather-related restoration work, earnings downgrades pushed the stock down to $2.00 by February 2025, half its previous highs.

Insider buying signals a turning point

Multiple managers pointed to the same tell at the bottom: management insiders buying shares in material size. Tamim Funds Management initiated a position at $2.20 following a deep-dive management meeting, citing the company's founder-led structure, industry leadership, solid balance sheet and improving medium-term fundamentals as reasons for confidence, while Ellerston Capital separately entered after the extreme share price weakness that followed the February 2025 result, believing the market had overreacted to short-term US business underperformance.

Johns Lyng Group: From Market Darling to Takeover Target. Having initiated a position at $2.20, based on our view that the business still retained core hallmarks: a founder-led structure, industry leadership, a solid balance sheet, and improving medium-term fundamentals. In July, we were rewarded. Pacific Equity Partners (PEP) swooped in with a $4.00 per share offer, valuing the business at $1.1 billion.

— Tamim Funds Management, Article, September 2025

A private equity bid arrives at a steep premium

Contact Asset Management confirmed the outcome in July 2025: a Scheme of Arrangement bid from Pacific Equity Partners at $4.00 a share, representing a 57 per cent premium to the pre-announcement price. Forager Funds described entering the position only months earlier and seeing the takeover complete at nearly double its entry price, while QVG Capital called the outcome bittersweet, believing PEP was buying the company at an attractive price even as the 23 per cent monthly gain benefited its own fund.

Johns Lyng had fallen sharply after mild weather and US missteps hurt earnings. Index selling made the share price decline worse, creating an opportunity for us to buy a business that was neither as good as investors thought in 2022 nor as bad as the market suggested in 2025. Pacific Equity Partners agreed, ultimately acquiring the company for $4.00 per share, a price nearly double the Fund's initial entry price.

— Forager Funds, Annual Report, June 2026

A lesson in cutting losses and revisiting the story

Monash Investors' experience showed the other side of the trade: the fund had originally invested in Johns Lyng during its US market expansion, exited in mid-2024 as the business disappointed and losses mounted, then rebuilt a position from April 2025 in the $2.20 range once sentiment had swung, in Monash's view, from extreme optimism to unjustified pessimism. By the time the stock approached its $4.00 takeover price in July 2025, Monash had trimmed its position from over 5 per cent to around 3 per cent of the portfolio, treating the near-cash-equivalent holding as liquidity for other opportunities, with the deal formally completing in October 2025.