ASX-listed SRG Global has wrapped up a A$46.4 million institutional placement of shares at A72c to fund its $80 million acquisition of mining and energy maintenance business, ALS Asset Care.
The balance of the funding is coming from a $5m share purchase plan, bank loan and cash reserves.
SRG’s share price has climbed about 15% this year to finish the week at 77c, capitalising the company at $343 million.
It said the Australia-focused ALS “asset integrity and reliability” service business had customers in the mining, oil and gas, energy, infrastructure and utilities sector, with estimated FY23 full-year EBOTDA of $15.4m on $135m revenue.
“About 99% of Asset Care’s earnings is maintenance related. A high proportion of revenue is contracted with typical duration of 2-5 years providing consistent, predictable earnings,” SRG said.
The ALS business had EBITDA margins of about 11%, “consistent with SRG’s asset maintenance business”.
The acquisition would give SRG a revenue mix of circa-43% in asset maintenance, 42% engineering and construction contracting, and 15% mining services.
The company’s $645m FY22 revenue included c$215m asset maintenance, $114m mining services and $315m engineering and construction contributions.