Emeco considering capital raising options

Western Australian earth moving company Emeco today announced it is pursuing advice and assistance on capital raising options, including the possibility of an initial public offering.

Emeco managing director Laurie Freedman said several significant growth opportunities had reached an advanced stage which required the company to assess its funding needs for 2006 and 2007.

This growth includes organic expansion of its existing customer base in Australia, acquisition opportunities in North America and Emeco's European works.

In December 2004, Pacific Equity Partners and Archer Capital funded a $499 million management buy-out of Emeco extracting a 75 per cent interest in the business, leaving the remaining 25 per cent with the Freedman led management team.

After raising $225 million late last year the company had said it was fully funded to meet its growth plans, but now Mr Freedman has said that as a result of continuing success the funds raised last year would be fully committed before the end of 2006.

"The directors have therefore decided to bring forward consideration of a further capital raising for the business to fund the growth of the group into 2007 and beyond," he said.

"Emeco has been very successful in capturing growth opportunities as they have arisen because we have had sufficient funds available to deploy quickly and we need to ensure we continue to have access to adequate funding."

Since the management buy-out the company has focused on growing its market position in Australia and Indonesia - organically and by acquisition - and has recently established a foot-hold in North America with rental equipment for oil sand operations in Canada.