03/08/2009 - 09:33

Southern Cross in $10m acquisition deal

03/08/2009 - 09:33

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Southern Cross Electrical Engineering has boosted its capacity by acquiring the overhead power line business from private company K.J. Johnson & Co for nearly $10 million.

Southern Cross in $10m acquisition deal

Southern Cross Electrical Engineering has boosted its capacity by acquiring the overhead power line business from private company K.J. Johnson & Co for nearly $10 million.

It's the second acquisition for Southern Cross in less than two months after it acquired FMC Corporation, which operates Hindle Offshore Services and Hindle Electrics, for $5.1 million in June.

Southern Cross today said it had executed a deal to acquire K.J., with the $9.6 million acquisition to be funded from existing case reserves.

West Perth-based Southern Cross said the acquisition represented earnings before interest and tax of 2.2 times.

Under the acquisition agreement, Southern Cross will acquire the assets of K.J. including premises in Bayswater and the business name.

K.J., incorporated 40 years ago, employs 30 people and its current general manager, John North, has agreed to stay on as part of the acquisition.

Southern Cross managing director Stephen Pearce said demand for overhead power line construction is expected to grow over the coming years.

"Southern Cross is already an active participant in this market and the addition of KJJ will increase our capacity to pursue these opportunities," he said.

"With the strong project pipeline in front of SXE and the recent acquisitions of KJJ and Hindles, Southern Cross' focus over the next 12 months will be on the strong organic pipeline it has and to complete the integration of the acquired businesses."

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