05/06/2018 - 15:03

GCS acquires 100% of subsidiary

05/06/2018 - 15:03

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Global Construction Services has moved to full ownership of its fast-growing east coast subsidiary, Gallery Facades, through a scrip deal worth up to $11.3 million.

Global Construction Services has moved to full ownership of its fast-growing east coast subsidiary, Gallery Facades, through a scrip deal worth up to $11.3 million.

GCS said Gallery Facades was expected to achieve 20 per cent revenue growth to $100 million in the year to June 2019.

Gallery Facades was established in 2016 and specialises in the installation of aluminium panelling on commercial buildings.

GCS acquired 51 per cent of Gallery Facades in August 2016 for a nominal sum, with a deferred payment tied to achieving unspecified financial milestones.

It has acquired the remaining 49 per cent by issuing 11.1 million shares to the minority shareholders, with a further 4.1 million shares to be issued dependent on financial performance.

With GCS shares trading at 74.5 cents, that values the acquisition at up to $11.3 million.

Its work in hand has grown from $80 million at the time of the initial acquisition to $238 million currently.

As part of the acquisition deal, the founders of Gallery Facades, Paul Dawson and Jacky Zhang, have extended their employment contracts to 2023.

GCS managing director Enzo Gullotti said the acquisition would underpin a stronger foundation for the company’s east coast growth.

He added GCS wanted to explore possible synergies it could offer as a single contractor providing concrete, formwork and façade construction packages.

GCS had total revenue of $121.1 million in the half-year to December 2017, with commercial contracting accounting for about three quarters of the total.

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