NRW Holdings has continued with its M&A spree, agreeing to acquire 100% of BGC Contracting in a deal that comes with an equity value of A$116.4 million ($78.8 million) and expands its Mining Technologies pillar.
BGC Contracting provides services to the resources, energy and infrastructure sectors across three core businesses: mining, construction and DIAB Engineering.
NRW responded to media speculation earlier this month by acknowledging it had been selected as the preferred bidder in the sale of BGC Contracting.
The agreement comes less than a year since NRW Holdings acquired RCR Tomlinson’s Mining and Heat Treatment businesses and a little over two years since it purchased Golding Group.
NRW said: “The business is a strong strategic fit adding significant scale through an expanded service offering to a high-profile client base with a long track record of contract renewal and extension.”
The deal is expected to provide significant strengthening of NRW’s ‘Mining Technologies’ pillar through the addition of DIAB Engineering, which provides specialist industrial engineering, shutdown maintenance and fabrication services and generates “annuity style” revenues, NRW said.
BGC comes with a fleet of over 200 items of “high-quality mobile mining equipment” with a book value in excess of A$200 million, according to NRW Holdings. It also has an existing contract portfolio and order book of around A$1.5 billion, which “delivers a step change in scale”.
NRW says the deal is highly earnings per share accretive and could have pre-tax synergies of A$15 million/y, driven by consolidation and reduction in duplication, including facilities and systems.
Jules Pemberton, CEO & Managing Director of NRW, said: “We are extremely pleased to announce the acquisition of BGC Contracting which is strongly aligned with our objective to pursue opportunities to further diversify our revenues and enhance shareholder returns.”
He added: “We are enthusiastic about the opportunities ahead for the expanded NRW group, to leverage the additional capabilities and regional strengths of the combined group and further capitalise on our strong market reputation.
“Together with our combined workforce of around 6,000 people supporting more than 100 projects around Australia, we are well placed to offer a diverse range of services and project solutions to clients across the infrastructure, resources, industrial engineering, maintenance and urban sectors.”