Belmont-based sampling equipment manufacturer Essa Australia Ltd will acquire Bibra Lake maritime engineering services provider Stace Pty Ltd for $2.2 million.
The full text of an Essa announcement is pasted below
The Directors of Essa Australia Ltd are pleased to announce the acquisition of the business and assets of STACE Pty Ltd. Stace, headquartered in Bibra Lake, Western Australia, supplies specialist engineering services to the maritime industry. This is a strategic acquisition for Essa, allowing both diversification into new markets and affording additional product offerings to Essa's mining and energy clients.
Stace was incorporated in 1994 and has enjoyed steady and sustained growth since then. This growth has been underpinned in particular by provision of goods and services to the Department of Defence, as well as commercial maritime operators. It recently expanded its activities to service customers in the mining and energy industries, which will complement Essa's existing platform.
Stace has significant growth potential and will prove a valuable addition to the Company.
Essa will pay $2.2 million for the acquisition. Stace employs 24 personnel and reported $3.9 million in sales for the financial year ended 30 June 2006. The transaction will be funded from existing cash reserves and senior bank debt. Importantly, the vendor of Stace will enter into a 9 month consulting agreement to ensure the smooth transfer of the business. The business will be incorporated as an independent subsidiary of Essa.
The purchase of Stace will be effective from 29 September 2006 and is expected to be accretive to earnings per share from the date of acquisition.
