Cape on the attack in defence business buy

BRITISH industrial services giant Cape has continued its expansion via acquisition in the Western Australian market with the purchase of Bibra Lake-based defence specialist Shoreguard Marine.

The deal was completed last month for an undisclosed price and adds to several major acquisitions made by Cape in 2007, when it sought to secure a position as a service provider to the resources and construction sectors in WA.

Shoreguard operates a specialised corrosion protection business that provides ultra-high pressure water blasting, protective coating, thermal and acoustic insulation, corrosion inspection, and surface preparation services, primarily to the Royal Australian Navy.

Apart from its base in Perth, Shoreguard has a facility in Sydney to service the navy’s operations there.

Shoreguard was established four years ago by Chris Murray and Barry Punter, who left another WA-based operator in the field, Alphablast, to establish their own business.

In December, Alphablast adopted the branding of its parent Orontide, based in Henderson.

There are several operators in the sector.

Cape said the acquisition is structured to provide the group with resources to further develop its service offering.

“Strategically the acquisition is expected to provide Cape with significant new opportunities within the offshore oil and gas markets, not only in the Far East/Pacific Rim but elsewhere across the footprint, where it can extend Shoreguard Marine’s specialised services as part of the Group’s valuable bundled services offering,” the company said in a statement.

Cape employs about 700 people in WA and has a client base that includes major companies Alcoa, BHP and BP.

The company has operated in WA since 2007, when it went on an Australian spending spree worth more than $430 million.

Cape’s initial deals were to buy Kwinana company Total Corrosion Control for $85 million and Melbourne-based Concept Hire Ltd, which owned Balcatta’s Blackadder Scaffolding Services, for $101 million.

Later that year Cape paid $247 million for Malaga-based scaffolding and formwork supplier PCH Group.

However, there was considerable fallout from the merger spree, with Cape facing competition from companies run by several former executives of entities it bought.

In early 2009 Cape had started legal action against 10 people who have left companies it acquired in order to set up new competitors.

These individuals include Darren Iannello, who was one of six former TCC Group executives to set up a WA office for major New South Wales company Giovenco Industries, as well as Jim Anderson and eight others who left PCH Group in order to establish Modern Access Services, a joint venture with Malaga company Modern Industries.