Tag Archives: Michael Shelby

Babylon adds to pump rental capacity with Trico agreement

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.”

Babylon Pump’s business development efforts power up

Babylon Pump & Power Ltd has entered into a conditional agreement for the acquisition of diesel engine specialist Primepower Queensland for up to A$4.2 million ($2.9 million) in cash, shares, delayed performance payments and assumption of debt.

Mackay-based Primepower was founded in 2004 and is a specialist in Cummins engine repairs and rebuilds to the Queensland resources sector, Babylon said, with the acquisition complementing Babylon’s Western Australia-based diesel maintenance division and diesel generated power and pumping rental business.

The company has grown into a highly regarded specialist provider of diesel maintenance to the resources sector with a client base including Peabody, Fortescue Metals Group, BHP Mitsubishi Alliance, Anglo American, Wesfarmers and Minerva, Babylon said. Primepower generated unaudited annual revenue of around A$9.1 million for the year to June 30, 2019, and adjusted net profit of some A$600,000.

“The acquisition is Babylon’s first move into the eastern states and forms part of the company’s growth strategy, and provides an ideal platform to expand Babylon’s successful specialty equipment rental business into the East Coast,” Babylon said.

The acquisition provides Babylon’s Diesel Maintenance division with extra scale, in addition to technical expertise in Cummins engines to complement its expertise in Caterpillar engines, Babylon Executive Chairman, Michael Shelby, said. “[It] will be the perfect springboard to introduce our power and pumping rental offering to the East Coast market,” Shelby said. “The acquisition also provides commodity diversity, exposure to a larger client base, many with national operations, and will deliver a step-change in our operating scale and revenue.”

Shelby hinted that this may not prove to be the end of the company’s M&A efforts.

“The resource services and related sectors remain very fragmented, and it has become apparent that there are a number further potential complimentary acquisitions and new business development opportunities available,” he said. “While focusing on its core business, it is Babylon’s intention to explore thoroughly opportunities to expand in conjunction with its strong organic business growth.”

The consideration is comprised of cash on completion of A$1.7 million (adjusted pro-rata for net assets), A$600,000 in Babylon shares, assumption of a A$500,000 trade finance facility, deferred consideration of A$1 million over two years (adjusted for net asset value), additional deferred consideration of A$500,000 conditional on a revenue requirement of A$8.9 million being met in the 2020 financial year.

The Primepower purchase will see Babylon acquire net assets including stock and work in progress of A$3.1 million, and goodwill and plant and equipment valued at A$1.1 million. As part of the deal, Primepower founder and owner, Michael Donegan, will also remain a Primepower executive for a minimum 12 months.