Decmil acquires SAS Telecom for $1m

Engineering and construction contractor Decmil Group is expanding its service offering with the acquisition of SAS Telecom for about $1 million, providing it with access to the telecommunication installation market.

SAS, a Balcatta-based telecommunications services company, fell into the hands of administrators in August following a contractual dispute.

It supplies communication systems, structured fibre and copper cabling, and data supply to accommodation villages, resources projects, government infrastructure and commercial buildings.

It also manages systems hosting and data transmission.

Decmil said there were synergies within its existing construction, engineering and accommodation services divisions, which would provide it with a platform in providing telecommunication-related managed services.

Decmil began diversifying its operations two years ago, through a series of acquisitions and upgrades of in-house capabilities, in response to the widespread slowing down of new construction works in the resources sector.

Under the terms of the deal, Decmil has agreed to acquire the remaining work in hand and other business assets for about $1 million.

“Strategically, the acquisition of SAS provides Decmil with direct access into the telecommunication infrastructure sector,” Decmil chief executive Scott Criddle said.

“We continue to seek ways to diversify our business beyond construction for the resources industry, and this acquisition will allow us to grow the range of operational services provided by Decmil.”

SAS posted an EBITDA of about $1 million for the full year to 30 June and about $14 million in revenue.

The transaction will be completed in December.

In August, Decmil posted a 10 per cent lift in net profit to $49.7 million for the full year, which was aided by new contracts for civil works such as roads and bridges, as well as strong financial performance by its Homeground accommodation village in Gladstone, Queensland.

Despite this, Decmil’s share price fell sharply soon after the full-year report was released.

A day before the report was published, Decmil was trading at $2.21 per share.

By mid-September it had fallen to around $1.80 per share.

Also in September, Decmil was awarded a $19.9 million deal to build the pedestrian bridge for the island at Elizabeth Quay, under a joint venture with Structural Systems and Hawkins Civil.

The bridge will be 20 metres high, five metres wide and will have a 5.2 metre clearance from the water, to allow for boat movements in and out of the inlet.

Decmil’s share price today was 2 per cent lower at $1.72 per share.