ASX-listed LaserBond’s A$9 million acquisition of earthmoving equipment and component repairer QSP Engineering will fast-track its entry into the Queensland market and add about $3.5m of high-margin revenue.
Thirty-six-year-old QSP recently moved into new premises at Bethania, south of Brisbane, and has invested in modern laser cladding and thermal spraying equipment. LaserBond plans to “leverage and upgrade” at modest cost the QSP facilities with what it sees as its unique metal cladding IP and technology.
In a September investment note on the company, CCZ Equities said LaserBond’s technology had been “proven over 30 years to restore worn component surfaces to last 5-10-times longer at less than two-times the cost of new parts”.
“Key catalysts ahead are, one, accelerating the licensing of this technology to global OEMs and, two, increasing sales of [LaserBond] branded high wear-resistant products [such as] steel mill rolls.
“We are forecasting plus-14.6% sales and plus-34.8% EPS CAGR over the next four years,” CCZ said.
LaserBond CEO Wayne Hooper said the QSP acquisition would allow the company to “extend its technical capabilities across the QSP customer base, which together with operating synergies will expand the bottom line of the combined entity”.
LaserBond is currently generating A$2.4m of NPAT on about $25m of annual revenue.
It said QSP had achieved circa-$1.1m net profit after tax in each of the past three years, but added the cash-purchase price was 9.6-times the target’s fiscal-year 2021 NPAT.
LaserBond expects to equity fund the deal via an institutional placement and share purchase plan.
LaserBond’s share price is up more than 40% this year, capitalising the company at nearly A$90 million.
