22/01/2008 - 15:16

Coote Industrial acquires rail maintenance group for $3.3m

22/01/2008 - 15:16

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Coote Industrial Ltd has acquired Melbourne-based locomotive maintenance and re-building company Rail Technical Support Group for $3.3 million.

Coote Industrial Ltd has acquired Melbourne-based locomotive maintenance and re-building company Rail Technical Support Group for $3.3 million.

Owned by principal Peter Kemp, RTSG is Australia's leading independent locomotive service provider to the freight and passenger rail industry.

The company operates from locations at Parkes and Broken Hill in New South Wales, Islington in South Australia and Dynon in Melbourne and employs 70 people.

Maddington-based Coote Industrial said since acquiring Gemco Rail in August 2007, it had continued to progress its medium to long term strategy of expansion via organic growth and acquisition.

"RTSG substantially advances this strategy, providing maintenance facilities in three additional states, and lending strong impetus to Coote Industrial's planned national rollout of rollingstock services," the company said.

RTSG's current FY09 forecast sales of $15 million and net profit after tax of $1 million aligns with an expected profitable second half for the 2008 financial year.

Coote said should all option deed conditions not be met, the acquisition price would reduce to $3 million.

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