Emeco Group in $9.7m acquisition of Bevans

West Perth-based Emeco Ltd's subsidiary Emeco International Pty Ltd has executed a formal sales agreement to acquire earthmoving business and assets of NSW-based independent earthmoving equipment rental and sales business Bevans for $9.7 million.

The purchase price will be payable in cash and shares in Emeco Ltd's parent company, Emeco Holdings Ltd, with the acquisition expected to be completed in early July.

Under the terms of the sale agreement, Emeco will acquire approximately 31 machines and all inventory and parts deployed in the business.

The principal of Bevans, Laurie Bevan, will join Emeco's Australian management team and will provide ongoing leadership to the Bevans business.

Earlier this month, Emeco confirmed it currently anticipates lodging its prospectus for its proposed initial public offering on the Australian Stock Exchange by the end of this month.

Credit Suisse, Citigroup and UBS have been appointed as joint lead managers of the IPO.

Below is the acquisition announcement (released today) and IPO announcement (released earlier this month):

Emeco International Pty Ltd, a wholly owned subsidiary of Emeco Ltd, has executed a formal sale agreement for the acquisition of the earthmoving business and assets of Bevans, an independent earthmoving equipment rental and sales business based in Orange, NSW.

Subject to the satisfaction of conditions precedent set out in the sale agreement, the acquisition of Bevans is expected to complete in early July.

The total purchase price for the business is $9.7 million, payable in cash and shares in Emeco Ltd's parent company, Emeco Holdings Ltd.

Founded in Orange over 25 years ago, Bevans is a sound business with good quality assets which are mainly deployed in the mining and civil construction sectors. The acquisition of Bevans provides Emeco with a platform from which it can expand into a number of mining, quarrying and civil construction opportunities in regional NSW and Victoria.

Under the terms of the sale agreement, Emeco will acquire approximately 31 machines and all inventory and parts deployed in the business. Emeco will offer employment to all of the employees engaged in the Bevans earthmoving business.

The principal of Bevans, Mr Laurie Bevan, will join Emeco's Australian management team and will provide ongoing leadership to the Bevans business.

EMECO GROUP CONFIRMS ANTICIPATED TIMING OF PROSPECTUS LODGEMENT

The directors of Emeco Ltd wish to advise that the Emeco Group has today confirmed it currently anticipates lodging its prospectus for its proposed Initial Public Offering (IPO) on the Australian Stock Exchange (ASX) by the end of June 2006.

In light of this, Emeco Ltd wishes to advise holders of the company's
exchangeable notes (Notes) that:

Consistent with the terms of issue of the Notes, holders of Notes resident in Australia will be given the right to exchange the principal amount outstanding under their Notes for shares to be issued under the IPO. That exchange right will occur at a price equal to 97.5% of the price at which shares are issued to retail investors under the IPO. Accrued interest on any such exchanged notes will be paid when the exchange into IPO shares occurs (currently anticipated to occur at the same time as redemption of any unexchanged Notes occurs (refer below)).

Emeco Limited has also determined to extend the exchange right described above (and the priority right described below) to holders of Notes resident in Hong Kong and Singapore, provided the provision of each of those rights to such holders falls within an exempt class of securities offering and does not require the relevant prospectus to be registered in the relevant jurisdiction.

Holders of Notes who do not choose to exchange their Notes as part of the IPO, and Holders resident in places other than Australia, Hong Kong and Singapore, will have their Notes redeemed following successful completion of the IPO for 106% of the principal amount outstanding under the Notes.

Holders of Notes resident in Australia, Hong Kong and Singapore who choose to exchange all (and not part only) of their Notes as part of the IPO will be given a priority right under the IPO to apply for shares at the IPO final price having an equivalent value to the principal amount of the Notes so exchanged.

The directors will ensure that Emeco Ltd continues to comply with its obligations to keep Note holders and the Note trustee informed of all material developments.

Regulatory notifications

A prospectus in respect of the IPO will be made available when the IPO securities are offered. Anyone who wants to acquire the IPO securities will need to complete the application form that will be in, or accompany, the prospectus.

The information contained in this release is not for publication or distribution to persons in the United States. The securities referred to in this release have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold unless registered or an exemption from registration is available. This notification does not constitute an offer of securities for sale in the United States, and the securities may not be offered or sold in the United States absent registration or an exemption from registration. The Emeco Group ("Emeco") does not intend to register any portion of the offering in the United States or to conduct a public offering in the United States. Any public offering of securities to be made in the United States will be by means of a prospectus that may be obtained from Emeco and that will contain detailed information about Emeco and management, as well as financial statements.