27/04/2021 - 12:00

GR Engineering flags $21m acquisition

27/04/2021 - 12:00

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GR Engineering Services is set to add $25 million to its full-year revenue, with the purchase of global engineering and technology services firm Mipac.

GR Engineering flags $21m acquisition
Geoff Jones says GR Engineering is expanding its service offering. Photo: GR Engineering Services

GR Engineering Services is set to add $25 million to its full-year revenue, with the purchase of global engineering and technology services firm Mipac.

The deal, valued at $21.4 million, is expected to boost GR Engineering's control system design capabilities and expand the Ascot-based company's broader mining and construction services offering.

GR Engineering said the purchase would also bolster its oil and gas, energy and water business (Upstream Production Solutions).

Based in Brisbane, Mipac has about 85 employees working across its headquarters and satellite office in Vancouver.

The company has been managed by major shareholders since its inception in 1997.

Mipac is expected to generate about $25 million in revenue this financial year, with a similar amount forecast for FY22 based on the company's current order book and project pipeline.

That will add to GR Engineering's anticipated FY21 revenue of at least $340 million, as announced in February.

By comparison, the company generated $176.4 million in revenue in FY20.

Managing director Geoff Jones said Mipac was highly regarded in the mining sector.

“The acquisition of Mipac is a unique opportunity for GR Engineering to expand the breadth of the group’s offering and to leverage Mipac’s capability as an enhancement to GR Engineering’s existing businesses,” he said.

GR Engineering will pay an upfront $14.5 million in cash and scrip to Mipac shareholders using existing cash reserves, which stood at $52.9 million at December 31.

The balance will be paid in deferred instalments in line with earnings targets, GR Engineering said.

Mipac's current management team, including managing director and major shareholder Eddie De Rivera, have agreed to continue in their roles post-acquisition.

"The Mipac team is looking forward to contributing to GR Engineering's vision and strategy, and providing a broader and enhanced offering to the combined customer bases of GR Engineering and Mipac," Mr De Rivera said.

At 12:32pm AEDT, GR Engineering was trading 1.2 per cent higher to $1.29.

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