Coote, GCS make acquisitions

Engineering and rail services company Coote Industrial Ltd and construction services company Global Construction Services Ltd have acquired smaller companies today.

Coote has acquired Bassendean-based heavy powershift transmissions repairer Industrial Powertrain for $5 million, the company has announced.

This most recent acquisition was entirely funded through debt facilities, and will see Powertrain come under the management of PC Diesel business manager Peter Crosswell - with PC Diesel operating as a subsidiary of Coote's Engineering Services division.

The acquisition continues a strong growth trajectory for the company, which has seen it acquire seven businesses over the past 18 months.

Meanwhile, GCS will acquire Bayswater Scaffold Hire for $500,000, less than two weeks after making its debut on the Stock Exchange

Bayswater Scaffold Hire provides scaffolding to the Perth residential market and has been active in the construction services industry for over 25 years.

The full text of a Coote announcement is pasted below

As a continuation of this Group's strong SERVICE focus, Coote Industrial is pleased to announce the acquisition of Industrial Powertrain.

Industrial Powertrain

Industrial Powertrain is a Western Australian-based specialist in the repair and overhaul of heavy powershift transmissions, torque converters, planetary axels and differentials. The transmissions are employed in front-end loaders, dump trucks, container forklifts and other heavy equipment used in mining, earthmoving and materials handling.

Engineering Services

PC Diesel, a subsidiary of Coote Industrial's Engineering Services Division, already works hand in hand with some of the largest mining companies within Australia and other operations in the South Pacific.

PC Diesel Business Manager, Peter Crosswell, who will also manage Industrial Powertrain, is confident the combined entities will provide a stronger service offering to our clients in the Australian mining industry.

"The acquisition introduces a highly complementary range of services and will extend the offering to our existing customer base in the Pacific Rim" he said.

Transaction

The business was acquired for $5m utilising existing debt facilities and will deliver additional NPAT of $1.175M in 2008, before interest charges.

Revised Coote Industrial FY08 Forecast

Incorporating recent additions Industrial Powertrain, FCD Container Logistics and Gemco Rail, Coote Industrial has revised 2008 full year projections as follows:

• Sales $214.50m
• NPAT $ 15.50m

The full text of a GCS announcement is pasted below

Construction services group Global Construction Services (ASX: GCS, "GCS Group") is pleased to announce the acquisition of Perth-based Bayswater Scaffold Hire.

Bayswater Scaffold Hire provides scaffolding to the Perth residential market and has been active in the construction services industry for over 25 years.

GCS Group will pay $500,000 in cash for the Bayswater business, which has an annual turnover of approximately $950,000 and strong profit margins.

The acquisition will be earnings accretive in its first year.

GCS Group Managing Director Enzo Gullotti said the acquisition was in line with the growth strategy set out in the Company's recent Prospectus.

"We are looking to make acquisitions that are synergistic with the Group's existing operations and which are earnings accretive," said Mr Gullotti.

"This acquisition is an excellent addition to GCS Group and is the first of many we expect to make in the coming 12 months.

"Although this represents a modest increase in the Group's revenue, it will have a very positive effect on GCS's earnings."

As part of the transaction, Bayswater Scaffold Hire owner Glenn Edwards will remain with the business, joining the GCS management team.

Settlement is expected to take place on 1 September 2007.