12/09/2012 - 10:05

Central picks up failed rival, eyes new markets

12/09/2012 - 10:05

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Central picks up failed rival, eyes new markets

Civil construction company Central Systems has expanded its business into the eastern states and the Northern Territory after acquiring the failed S&N Civil Constructions.

The acquisition doubles Central’s employee numbers to 450 and adds an additional $60 million to its projected $80 million turnover.

S&N Civil went into voluntary administration in April, with Ferrier Hodgson appointed as the administrator.

Ferrier Hodgson attributed the demise of S&N Civil to difficulties with a contract, which it would not disclose, and rapid expansion that over-extended the company’s resources. When S&N Civil went under it had 300 employees. 

Central Systems managing director Richard Eden said “the vast majority, not all of them, have been taken over by Central”.

“The rest have left through normal contract attrition and while the company was in administration,” Mr Eden said.

About 230 S&N Civil employees have been added to Central’s workforce, which previously had 220 staff.

Central Systems bought the entity as a whole last week when a deed of company agreement (DOCA) was released.

“We have now completed the acquisition with the DOCA settled on the 3rd September, 2012, and we are making progress integrating our management systems and procedures,” Mr Eden said.

“This acquisition significantly strengthens our existing civil and concrete construction capability and provides Central Systems with continuing contract operations in New South Wales and Queensland.

Central Systems can now offer a substantial civil, concrete contracting option to the marketplace both in Western Australia and the eastern states.”

He said Central planned to retain its headquarters in WA and has had discussions about opening a couple of branch offices, in particular one in Queensland.

S&N Civil’s current projects will continue under the new name CS Civil Construction, a wholly owned subsidiary of Central, while S&N Civil is fully integrated into Central’s operations and its name.    

The 28-year-old S&N business had WA contracts with clients such as BHP Billiton, the Water Corporation and Rio Tinto; this was part of the allure for Central.

“We had a look at who S&N was working with and its clients such as Xstrata and Newcrest and the like are all quality clients, this was very attractive to us,” Mr Eden said. 

Mr Eden also attributed Central’s decision to acquire the stricken company to its inter-state operations. “The geographical spread appealed to us from a risk management point of view with the recent slowdown in the mining sector.”

Having won a WA Business News Rising Star award this year for extraordinary growth, Mr Eden said the company was now looking to consolidate.

“Growth will stabilise and the business will consolidate itself, we’ll see what the market’s going to do over the next 12 to 24 months,” he said.

 

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