24/07/2017 - 10:46

Tempo buys electrical engineer

24/07/2017 - 10:46

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Tempo Australia has announced the acquisition of NSW-based electrical engineering company KP Electric for up to $10.1 million.

Tempo buys electrical engineer
KP Electric operates at 12 offices across Australia, including one in West Perth.

Tempo Australia has announced the acquisition of NSW-based electrical engineering company KP Electric for up to $10.1 million.

ASX-listed Tempo will pay an initial $6.8 million in cash to acquire KP Electric, plus a further $3.3 million subject to the achievement of certain milestones.

The acquisition price represents an earnings before interest, tax, depreciation and amortisation multiple of 2.5-times.

KP Electric will be merged with Tempo’s existing Cablelogic maintenance division, leveraging off the target’s existing client base that includes Nokia Australia, Woolworths, Fremantle Ports and the federal government.

KP Electric provides electrical service, maintenance and compliance of existing electrical assets, and energy management, out of its 12 offices across Australia, including one in West Perth.

“With KP Electric servicing our commercial and industrial maintenance customers, Tempo, through its Cablelogic project division, will remain focused in targeting electrical project development and refurbishment work, however, the division will now pursue work across all states, utilising the acquired national footprint,” Tempo managing director Max Bergomi said.

“We expect that Tempo’s strong balance sheet, robust systems and processes, and experienced management team will act as a further enabler for the KP Electric core business, allowing it to target more complex maintenance opportunities across larger Australian industrial and commercial sites. It’s a win-win situation.

“The acquisition will provide Tempo with profitable, low risk and recurring earnings and aims to reduce, especially over the short term, Tempo’s dependence on lumpy resources-based construction work and our exposure to any deferral in resources maintenance activity.

“Importantly, the deal sees two organisations with a shared vision, values and approach join forces and use technology to drive shareholder value and operational efficiencies.”

Shares in Tempo were 8.3 per cent higher to 19.5 cents each at 10:45am.

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