NRW Holdings is in pole position to take over Primero Group following a cash and shares bid that values Primero at A$100 million ($74 million).
Primero Directors, who own around 30% of Primero’s equity, have unanimously recommended its shareholders accept the offer in the absence of a superior proposal coming forward.
The addition of Primero, NRW says, would provide significant engineering, procurement and construction (EPC) capability to NRW’s renamed “Minerals, Energy & Technologies” business pillar.
For Primero, meanwhile, it would deliver a “meaningful premium” to recent market trading levels and avoid the need for a potential significantly dilutive capital raising to fund working capital required to deliver its 2021/2022 financial year contracted order book, NRW said. Primero currently has a contracted order book for FY21 of circa-A$285 million and holds preferred EPC contractor status across multiple projects totalling circa-A$900 million.
Managing Director of NRW, Jules Pemberton, said: “The acquisition of Primero will provide NRW with the opportunity to expand its Minerals, Energy & Technologies specialised capability and to leverage the combined expertise of both companies to pursue new business initiatives across a large pipeline of opportunities.
“It builds on NRW’s recent acquisitions of DIAB Engineering and RCR Mining Technologies and represents a further diversification of our strategic platform to offer clients continuity of services across the whole lifecycle of resource projects – from early planning, design, development, construction to operations and maintenance. In addition, Primero is also well positioned to future-focused energy solutions, including lithium and hydrogen technologies.”
Primero Managing Director, Cameron Henry, added: “The combination of NRW’s diversified delivery model coupled with the Primero capabilities will provide our client base with a unique end to end delivery model that will differentiate within the current market and will rapidly accelerate Primero’s growth strategy.
“Our teams have been working well at multiple levels together over the past 12 months and have several projects currently approaching delivery stage that will showcase the model.”
Detailed information relating to the offer will be set out in the Bidder’s Statement and Target’s Statement, which are expected to be dispatched to Primero shareholders in late November and early December 2020, respectively, the companies noted.