Big deals flow thick and fast in '05

The year 2005 was the best of times for many businesses in Western Australia.

The state’s V8 economy is roaring ahead, firing on all cylinders, and there is no sign of the boom conditions letting up.

With new mining, oil and gas and infrastructure projects commencing, businesses right across the state are benefiting from the buoyant economy.

Name just about any profession – engineering, the law, accounting, geology, or real estate – and you will find people working flat-out trying to keep pace with the volume of work.

This is reflected in WA Business News’ review of 2005’s top deals, which canvasses key aspects of the state economy; from deals to develop new resources projects to company takeovers, property leasing deals, multi-billion dollar export contracts and mining and engineering contracts.

The iron ore sector features prominently. The current boom has paved the way for Gina Rinehart to finally realise the ambition of her late father Lang Hancock to develop a new mine in the Pilbara.

The joint venture deal between Hancock Prospecting and Rio Tinto Iron Ore, headed by Perth-based chief executive Sam Walsh, ranks as one of the top corporate deals of 2005.

Also in the iron ore sector, US company Cleveland-Cliffs completed an astutely priced takeover of local producer Portman and, late in the year, there was a flurry of activity after junior explorer Cazaly Resources snared the Shovelanna deposit from under the noses of Rio Tinto, Hancock Prospecting and Wright Prospecting.

Guildford company Allied Equipment is an example of the many little-known businesses that are benefiting from WA’s resources boom.

Allied is one of the state’s major suppliers of heavy earthmoving equipment to miners and mining contractors.

With its sale during the year to Coates Hire the two owners, David Edwards and Peter Kirkham, reaped a big reward from many years of hard work.

Other companies benefiting from the iron ore boom include engineering, construction and mining contractors, including Calibre Projects, Sinclair Knight Merz, Macmahon Holdings and Monadelphous.

Also last year, current and aspiring resource developers signed massive trade deals with customers in Japan, China, Korea and other parts of the world.

These contracts provide a crucial step in underpinning new developments in sectors like iron ore and oil and gas, such as Chevron’s massive Gorgon project and Woodside’s Pluto project.

The latest trade data from the Australian Bureau of Statistics released this week, showing another monthly increase in the country’s trade deficit, highlights more than ever the importance of WA resource projects.

Exports from WA are on the rise but more growth is needed – and is likely to come – to offset surging imports and bring the country’s trade back towards balance.

The stockbroking industry is another sector to benefit from WA’s resources boom.

The total value of WA capital raisings hit $3 billion last year, helped by big floats such as Alinta Infrastructure Holdings, a flurry of smaller mining and engineering floats, and new capital raisings by established businesses looking to expand.

The year also marked the return of a WA brewing company to the stock exchange, in the form of Little World Beverages.

The winners included local stockbroking firms Patersons Securities and Euroz Securities, which for the third year running have dominated capital raisings by small to mid-sized listed companies.

The iron ore sector made a big contribution, with rapid growth in the value of capital raisings.

The review of WA’s top deals also looks at the role of private equity, which featured in some of the year’s most interesting transactions, including the agreed sale of beef processor EG Green’s core assets.