Bibra Lake's aiConstruction, the building arm of listed Perth company aiLimited will acquire Bunbury-based construction company Cimeco Group Pty Ltd in a deal worth up to $9 million.
The move is yet another sale of a private company, adding to around $100 million in similar transaction in recent weeks.
The purchase consideration will be the issue of 20 million shares, or 12 per cent, in aiLimited to Cimeco vendors, to be placed under a two year escrow, as well as an earn out component which will allow vendors to earn up to $2 million payable if profit targets are met. aiLimited shares were trading this morning at 35c, making the sale worth up to $9 million.
Cimeco was spun out of defunct Bunbury construction company Devaugh Pty Ltd which went into administration with 100 employees and debts of $14 million. After an $8 million investment from businessman Andrew Ellison, Cimeco went on to earn $40 million in revenue in the 2005-2006 financial year, and is expected to earn a pre-tax profit of $2.5 million.
Mr Ellison was previously the general manager of aiMaintenance Ltd, a 50 percent owned subsidiary of aiLimited
In an announcement to the stock exchange, aiLimited managing director Tony Dale indicated his company hoped to profit from Cimeco's range of construction services, as well as its longstanding relationships with major south west regional clients Alcoa and Worsley.
It is intended that Cimeco continue business as normal operating inder the Cimeco Group business name.
This is the second acquisition in three months for aiLimited, which announced in May its $2.3 million investment in Perth based natural gas fuel company Motive Energy Pty Ltd for an initial 36 per cent stake. Under the terms of its investment the Company is entitled to increase its initial equity to $2.6 million, thereby equalling the shareholding of Alinta Ltd, to hold two out of a maximum of six directorships and to be actively involved in the management of the company.
The acquisition puts Cimeco in league with other private companies recently acquired by listed ones, including Monarch pool systems, which was acquired for $30 million by GUD Holdings, and Surpac Minex Group, acquired by Gemcom Software for $34 million.
