Reports disclose Leighton buying spree

LEIGHTON Holdings Ltd has emerged as one of the most active buyers of small Western Australian businesses in the past year, paying more than $22 million for three service organisations that expanded its footprint in Perth and the South West.

Disclosed in Leighton's annual report, the purchases were among a string of deals over the past 12 to 18 months where the price remained undisclosed until the recent reporting season commenced.

It also paid $53.5 million to buy Melbourne-based Silk Telecom Pty Ltd, giving Leighton another exposure to WA through the Bright Telecommunications network, which was bought from Western Power in 2006 for $4 million.

The biggest single acquisition in the state last year was the $12.7 million paid for Australian Mine Services Pty Ltd, a Bayswater-based firm providing specialist engineering design and maintenance services to the mining sector founded by Ian Massara and Julie Smith-Massara in 2003.

AMS contributed $700,000 to Leighton's consolidated net profit for the five months ending June 30. It became part of Leighton's HWE operation, run by Leighton Contractors Pty Ltd, which also owns Perth-based Broad Construction Services Pty Ltd.

Another Leighton subsidiary, Thiess, incorporated two businesses run out of Bunbury by local businessman Bob Archibald. Leighton paid $4.9 million for 10-year-old Southwest Energy, a power transmission line installation business, and $4.7 million for Minipickers, a 20-year-old cherry-picker hire firm out of which the power line business had arisen.

Mr Archibald has only recently completed a 12-month earn-out arrangement with Thiess.

He said he was approached by Thiess to buy the business after it had decided to grow its SW presence.

"We did not put it on the market," Mr Archibald said.

But it wasn't just in the engineering services area where these purchases with undisclosed price tags took place.

The biggest of these appears to be $22.3 paid by Melbourne-based The Jeminex Group Ltd, which bought Worksense, a WA-based group specialising in the retail and wholesale supply of industry workwear, as well as corporate clothing and school wear. The Worksense deal took place at the end of calendar 2007, but it had generated total sales of about $18 million in the year to June 30 2007.

The Worksense acquisition by Jeminex, which is backed by private equity investor AMP Capital, was followed by two more purchases here - footwear supplier JLD Footwear and workwear retailer Midland Disposal Stores, which both have head offices in Midland. Those businesses were bought in 2008 and were therefore not detailed on in Jeminex's report for the half-year ending December 31.

AMP Capital Investors' Private Equity Fund III is the largest investor in the Jeminex Group and other shareholders include members of the board and senior management.

Another purchase previously reported but without a price tag was Allomak Ltd's $12.5 million purchase of Alanco Australia Pty Ltd, a 20-year-old importer and distributor of auto electrical, communications and auto accessories products. About $2.6 million of the consideration was in Allomak shares.


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