Southern Cross acquires Hindle for $5m

Southern Cross Electrical Engineering will pay up to $5.1 million to acquire FMC Corpration, which operates Hindle Offshore Services and Hindle Electrics, as part of its strategy to re-enter the oil and gas sector.

The announcement is below:

Southern Cross Electrical Engineering Limited (ASX:SXE) is pleased to announce that it has executed an agreement today to acquire FMC Corporation Pty Ltd which operates the Hindle Offshore Services and Hindle Electrics ("Hindle") electrical maintenance businesses with completion expected to occur on 1st July 2009.

Hindle was formed in 1999 to primarily provide electrical maintenance and inspection services to offshore exploration drilling rigs. Hindle's has a team of specialised electricians with deep experience in the oil & gas sector.

The acquisition of Hindle complements SXE's oil & gas growth strategy and provides a specialist skill set in the important offshore electrical maintenance and inspection markets.

In addition to its offshore capability, Hindle also provides electrical maintenance and construction services to the mining industry.

As part of the agreement, Hindle's founder, Craig Hindle will join SXE as the General Manager Hindle Electrics/Offshore and will continue to run the business under the Hindle brand. The final consideration will range between $4.6 million and $5.1 million subject to Hindle achieving certain KPI's over the next two years. The consideration will be paid as a combination of cash and shares. The acquisition is expected to be EPS accretive from completion.

SXE Managing Director, Stephen Pearce, said "he was very pleased to have the Hindle brand and business as part of the Southern Cross Group. Craig and the team at Hindle have done a great job at building the Hindle business in the specialist offshore area and I look forward to Hindle continuing to grow in the coming years. The two businesses have similar service delivery cultures and Hindle will assist with SXE's oil & gas growth strategy."