19/12/2007 - 22:00

Global Construction makes acquisitions

19/12/2007 - 22:00

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Global Construction Services Ltd has announced the acquisition of two Western Australian concrete contracting businesses, Newave Contracting Pty Ltd and Blueline Contracting Pty Ltd, for a total of $7.9 million.

Global Construction makes acquisitions

Global Construction Services Ltd has announced the acquisition of two Western Australian concrete contracting businesses, Newave Contracting Pty Ltd and Blueline Contracting Pty Ltd, for a total of $7.9 million.

Involved in the supply and installation of concrete, Newave and Blueline also provide related labour services to customers in Perth’s commercial construction industry.

GCS recently listed on the Australian Securities Exchange, and its latest acquisitions add to a growing portfolio of Perth-based companies, following the purchase of Budget Portables last month and Bayswater Scaffold Hire in August.

GCS Group managing director Enzo Gullotti said the acquisitions were part of the company’s growth strategy to diversify into related industries and expand the product range through acquisitions.
“The acquisition of Newave and Blueline increases the group’s product range and customer base, enabling us to offer a more comprehensive service to customers and cross sell both new and existing products and services,” he said.

“Newave and Blueline have been in the Western Australian construction industry for the past seven years and have a good reputation in the building services market. Given that GCS already operates in this sector, we believe the acquisition and integration risk is low.”

Consideration for the acquisition will be satisfied by the issue of 333,333 shares in GCS at an issue price of $1.50 and a cash payment of about $7.4 million, $2 million of which will be deferred until Newave and Blueline achieve an agreed EBITDA (earnings before interest, tax, depreciation and amortisation) milestone.

The cash component of the acquisitions will be funded from cash reserves and debt.

The acquisitions are expected to boost earnings in their first full year under GCS ownership.

Subject to finalisation and execution of formal documentation, the transaction will be effective from January 1 2008, with formal settlement expected to take place late January 2008.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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