Babylon Pump & Power Ltd says it will expand its rental fleet of pumps through an unconditional agreement for the acquisition of assets from Tilbrook Ryder Investments Company Pty Ltd (Trico).

The transaction, expected to complete on October 1, 2020, will be funded by a cash payment of A$750,000 ($537,817) from existing asset finance facilities and issuance of just over 7 million fully paid shares in line with Babylon’s placement capacity, it said.

“The assets are a valuable addition to Babylon’s existing rental fleet, providing quality pumping assets for immediate use that are traditionally long lead items from OEMs,” it said.

The rental and workshop assets include two Multiflo RF-420EXHV dewatering pumps, multiple other skid-based pump units, ancillary rental equipment to facilitate pumping projects and workshop ancillary equipment to support continued growth, Babylon added.

“Trico’s fleet provides immediate opportunities to increase rental revenue in Western Australia as well as providing assets which can be used in the Queensland rental market as rental activity progresses in Babylon’s Mackay based operating entity, Primepower Qld,” the company said.

The transaction will result in entities controlled by the founders of Trico becoming shareholders in Babylon and the consideration shares will be subject to a one-year voluntary escrow, Babylon explained.

Babylon Executive Chairman, Michael Shelby, said: “This is an exciting opportunity to purchase quality long lead assets at a discount to replacement value. We are confident the assets will be deployed immediately, and on attractive rentals that will deliver a rapid payback of their acquisition cost.

“I am equally excited to have the founders of Trico, Tony Ryder and Dave Tilbrook, as supportive shareholders of Babylon. Both founders have many years of experience in the pump rental and heavy equipment industry and have the ability to offer valuable support and industry insight to Babylon as a rapidly growing company in this sector.”