MINING services company NRW has acquired 100pc of BGC Contracting for an equity value of $116.4m and implied enterprise value (EV) of $310m.
Essentially, the implied EV is an alternative measure of a company’s value and covers BGC’s market cap including short and long-term debt as well as any cash on the balance sheet.
NRW’s chief executive and managing director Jules Pemberton said the company is extremely pleased with the acquisition as it aligns with goals to pursue diverse revenue opportunities.
“BGC Contracting has a well-recognised and proud history build around the strong foundations set by the late Len Buckeridge,” Mr Pemberton said.
“With an excellent track record supported by a diversified earnings base, extensive fleet and a long history with several high-profile clients, the acquisition is strategically and financially compelling and aligns with NRW’s objective to deliver growth to the business and drive NRW shareholder value.”
BGC Contracting consists of three core businesses: mining, construction and DIAB Engineering – with the latter being the key attraction for NRW.
The company said DIAB Engineering would ‘significantly strengthen’ its mining technologies pillar through the addition of specialist industrial engineering, shutdown maintenance and fabrication services.
“This transaction will enhance our core business across a variety of key financial and operational metrics and provides our shareholders with diversified exposure to the mining technologies pillar, which delivers annuity style earnings,” Mr Pemberton said.
The value of the acquisition is underpinned by a fleet of more than 200 items of high-quality mobile mining equipment with a book value in excess of $200m and an existing contract portfolio and order book of around $1.5b.
“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,” Mr Pemberton said.
“Together with our combined workforce of around 6000 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.”
NRW is undertaking a fully underwritten placement to raise $120m (before costs) and separate to this, intends to undertake a share purchase plan (subject to a $10m cap) and will assume $193m of debt related to asset finance.
