Coote Industrial pays $4.25m for rail welding business

West Perth-based Coote Industrial Ltd has agreed to purchase the assets of Bucks Rail Welding, a New South Wales based specialist rail track welding business for $4.25 million.

Coote Industrial said the acquisition further extended its interests in rail services; an industry benefiting from renewed government investment in rail infrastructure and increased demand from mining, agricultural and state operated passenger sectors.

Managing director Michael Coote said the Bucks Rail Welding deal was a well timed opportunity for the group, providing it with a strategic advantage in the niche market of rail track welding.

"The business will be integrated into Momentum Rail, a provider of below track support services to the national rail industry. This purchase makes it arguably the largest rail welding contractor in Australia." he said.

Bucks Rail Welding will be earnings accretive for the Coote Industrial Group and was purchased on an NPAT multiple of 5.5X.

The asset purchase will be funded out of existing cash flow, with payment staged over four instalments.