OTOC buys surveying business for $12m

Shares in Perth-based contractor OTOC have surged on news it is looking to expand its presence on the east coast with the acquisition of Sydney-based Geo-Metric Surveying for up to $12 million.

Under the terms of the deal, OTOC will provide $7 million in cash and $2.5 million in shares to fund the purchase of the surveying business, while the remaining amount will be payable upon Geo-Metric achieving certain performance milestones.

OTOC said the acquisition built on its strategy of creating a multi-disciplinary national surveying business.

“With a client base predominantly of tier-one contractors such as Thiess, Leighton Holdings, Fulton Hogan and Acciona, Geo-Metric is ideally positioned to capitalise on the substantial current and planned civil infrastructure investment on the east coast of Australia,” OTOC said in a statement.

“Geo-Metric has a strong track record of profitability, with an average EBITDA margin of about 28 per cent over (the last two financial years), with a demonstrated ability to scale-up in response to strong demand.”

Following completion of the acquisition, OTOC will have over 280 employees spread across its offices in Western Australia, Victoria, NSW and Queensland.

The directors and principals of Geo-Metric will enter into two-year employment contracts, with an option to renew for a further two years.

OTOC chief executive Simon Thomas said the Geo-Metric acquisition was another key step in the company’s national surveying strategy, following its acquisition of Bosco Jonson for $14 million in August.

Geo-Metric was established in 2001 in Sydney as a privately owned infrastructure and engineering surveying business.

It employs about 52 people throughout its offices in several states, including Western Australia, and has worked on infrastructure projects including railways, tunnels, roads and bridges.

Following announcement of the acquisition today, OTOC’s shares exited a trading halt 10.26 per cent higher at 21.5 cents per share at 10:15am.