GenusPlus Group has made its largest acquisition to date, paying up to $55 million for Perth-based Railtrain Holdings to support its continued growth and diversification.
Managing director David Riches said this was another step in his strategy to expand into the rail infrastructure sector.
“Railtrain is a highly logical acquisition which will add critical scale and expands the geographical and service capability of our existing MGC rail business,” he said.
“The transaction will allow Genus (through MGC and Railtrain) to provide a more comprehensive service to our customers.”
Genus has traditionally focused on the power and telecommunications sectors but has diversified into new industries as it has expanded across Australia.
It moved into the rail sector in April last year when it bought MGC Group for up to $20.75 million.
Mr Riches said he planned to integrate the Railtrains and MGC businesses over the medium term.
Genus shares edged up 1.5 per cent to $8.10 at 10am this morning, after briefly touching an all-time high of $8.18.
The strong share price reflects its rapid and profitable growth and the prospect of more to come, with the company forecasting 20 per cent revenue growth and 35 per cent EBITDA growth in the current financial year.
Genus has bought Railtrain from principals Chris Chalwell, Brendan Williams, Andrew McCutcheon and Graham Butler, who previously worked for Skilled Group before establishing Railtrain in 2010.
Messrs Chalwell and Butler are currently non-executive directors of Railtrain while Mr Williams is general manager corporate services.
Genus will make an upfront payment of $36.5 million and could make further payments of up to $18.5 million, depending on the earnings performance of the business in 2026 and 2027.
The payments will be primarily in cash, with the final contingent payment of $2.5 million to be in Genus shares.
Genus said the maximum acquisition price was at an attractive multiple of 2.75 times enterprise value to earnings (EBITDA).
Railtrain generated normalised revenue of about $96 million in FY25 and EBITDA of about $16 million.
It is expected to have a weaker FY26 due to project delays.
The contingent payments are subject to achieving EBITDA targets of $15 million in CY26 and $20 million in CY27.
The business delivers services such as overhead wiring, rail maintenance and construction, rail signalling and electricals and supplies and trains rail personnel to rail operators and infrastructure owners.
Founded in 2010, it has approximately 300 staff and 6 offices or depots across Western Australia, Queensland and New South Wales.
The current management team led by chief executive Gary McLaughlin is expected to continue running the business.
Sternship Advisers acted as corporate adviser and Gilbert + Tobin acted as legal adviser to Genus.
