03/10/2007 - 10:41

GCS acquires Budget Portables for $10m

03/10/2007 - 10:41

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Redcliffe-based construction services company Global Construction Services Ltd has acquired Landsdale-based accommodation provider Budget Portables for $10 million, the company has announced.

GCS acquires Budget Portables for $10m

Redcliffe-based construction services company Global Construction Services Ltd has acquired Landsdale-based accommodation provider Budget Portables for $10 million, the company has announced.

The purchase will be financed from cash reserves and debt, and includes plant and equipment with a replacement cost of more than $9 million.

Budget Portables' customer base is predominantly in the commercial construction industry.

The acquisition, financed from existing cash reserves and debt, is the second by GCS after listing in August. The company acquired Bayswater Scaffold Hire for $500,000 in early September.

Global chief executive Enzo Gulloti said the company continues to examine other acquisition opportunities around Australia.

"We already have a division that operates in the same market space (as Budget Portables), so this transaction is about increasing our position in that market space," Mr Gulloti said.

Shares in Global Construction Services closed two cents, or 1.32 per cent, higher to $1.53.

The full text of a GCS announcement is pasted below

Construction services group Global Construction Services (ASX: GCS, "GCS Group") is pleased to announce the acquisition of Western Australian site accommodation provider Budget Portables.

The purchase consideration is $10 million, comprising a full cash payment. The purchase will be financed from cash reserves and debt.

Budget Portables is a temporary site accommodation provider supplying transportable buildings and chemical toilets to the Western Australian market. Its customer base is predominantly in the commercial construction industry.

The acquisition includes plant and equipment with a replacement cost in excess of $9 million.

Budget Portables has demonstrated consistent growth in earnings over the last three years. The acquisition is expected to be earnings accretive.

GCS Group Managing Director Enzo Gullotti said the acquisition of Budget Portables was a well-timed opportunity for GCS Group and would significantly increase the Group's presence in the temporary site accommodation market.

"The acquisition of Budget Portables will leverage GCS to become one of the major players in this segment of the market," said Mr Gullotti.

"Budget Portables has been in operation for approximately 17 years and has a very good reputation in the building services market.

"The business has a strong longstanding clientele, and will bring to GCS a new and fresh customer base to which we will look to cross-sell our suite of other products and services."

Budget Portables is GCS Group's second purchase since its ASX listing on 17 August 2007.

Mr Gullotti said GCS Group continued to evaluate a range of opportunities that have the potential to provide a positive effect on GCS's earnings and create value for shareholders.

"This is another strategic acquisition for us," he said.

"The business is synergistic with GCS's existing operations and will have a positive earnings per share impact."

Ernie Weston, co-founder of Budget Portables, will remain with the business for three years as General Manager. Mr Weston has 27 years experience in the construction services industry.

The acquisition is subject to execution of the formal documentation. Settlement is expected to take place on 1 November 2007.

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