Acquisition activity in the state’s geoanalytical testing industry is continuing, with Balcatta-based metallurgical testing firm Ammtec Ltd acquiring engineering group MARC Environmental Solutions for $12 million.
Acquisition activity in the state’s geoanalytical testing industry is continuing, with Balcatta-based metallurgical testing firm Ammtec Ltd acquiring engineering group MARC Environmental Solutions for $12 million.
The acquisition, funded through a share placement that raised $9.92 million, will diversify Ammtec’s core metallurgical and mineral testing consulting business by bringing in lab design, lab equipment and dust and fume control system capacities.
The acquisition is Ammtec’s first in WA, after it bought laboratory businesses in NSW, South Australia, and Tasmania.
Ammtec managing director Rod Smith said the two companies had a long association, with MARC supplying Ammtec with dust control systems and designing its new assay lab at Ammtec’s Balcatta laboratories.
“The owners [of MARC] realised that to take the business to the next step they needed to make a fairly sizeable capital injection,” Mr Smith told WA Business News.
“We were looking for a business that was run on similar lines and philosophy, and which operated in the same sector as we do.”
The directors of Welshpool-based MARC, Ron Marian, Murray Kerr, Allen Sharman and Chris Pearson, will remain for a three-year period with the company they set up in 1999.
Ammtec recently completed a $12 million upgrading of its Balcatta operation, which involved a significantly expanded pilot plant facility, introduction of new mineralogical equipment, and completion of the new assay laboratory.
It currently owns and occupies four 2,000 square metre buildings, and leases about 7,000sqm of warehouse and lab space.
The acquisition is expected to increase Ammtec’s revenue and net profit after tax by 40 per cent.
Ammtec reported a NPAT for the half year to December 31 of $2.7 million, up 28 per cent on the previous corresponding period.
The acquisition follows several in the sector in the past year. Most recently, UK-based inspection and testing group, Inspicio plc, bought minerals assayer Kalassay Group for an undisclosed sum.
Last year, privately owned assay labs Ultra Trace and Genalysis were bought by larger firms Amdel and Intertek Group respectively.
Private equity firm CHAMP Ventures, the owners of Amdel, is reportedly pushing ahead with a dual-track sales process of its geoanalytical testing and minerals processing business, with a view to a public offer.
Meanwhile, Belmont-based mineral sampling equipment manufacturer Essa Australia Ltd also posted a record profit result for the half year ended December 31 2007 of $1.9 million, up 23 per cent over the previous corresponding year.
The result was driven by a strong increase in sales revenue, up 58 per cent to $20.4 million, on the back of continued high level activity in the resources sector.
Last October, Essa announced a $7 million deal for the sale of its new laboratory automation system to global company, SGS Group, as well as an additional $4 million worth of orders from several of its major clients.
