Western Australian headquartered engineering group VDM Group Ltd has entered into a contract to acquire Darwin-based environmental consultancy business EcOz Environmental Services, effective 1 July 2006, for $250,000.
Western Australian headquartered engineering group VDM Group Ltd has entered into a contract to acquire Darwin-based environmental consultancy business EcOz Environmental Services, effective 1 July 2006, for $250,000.
The purchase price is to be paid in cash represented by $167,000 of goodwill, $64,000 of plant and equipment and an estimate of $18,000 of cash and work-in-progress to be adjusted to true values as at close of business 30 June 2006.
Commenting on the acquisition, VDM Group's CEO, John Farrell, said: "EcOz represents a strategic investment for the VDM Group to expand its presence in the Northern Territory. EcOz is well established having been operating for more than 10 years."
Last month, VDM's subsidiary Keytown Constructions was awarded a $4.2 million warehouse construction contract at Hazelmere in outer suburban Perth.
The contract is for the construction of a 5,400 square metre, two storey administration and warehouse facility, which will be leased to Best Tractor Parts.
VDM Group reaffirms that on the basis of unaudited management accounts, the company anticipates that its forecast net profit after tax of $5.5 million, as disclosed in the company's prospectus dated 3rd January 2006, will be achieved.
At 1300 WST, shares in VDM were at $1.80.
Below is the full announcement:
VDM Group Limited (ASX: VMG) today announced that it had entered into a contract to acquire the Darwin-based environmental consultancy business EcOz Environmental Services (EcOz), effective 1 July 2006.
The principals of EcOz, Noel Preece and Penny van Oosterzee, will enter into standard executive employment agreements each for a two-year period but with bonus performance criteria based on achieving turnover and profit targets beyond levels upon which the acquisition value is based.
The purchase price of $250,000 is to be paid in cash represented by $167,000 of goodwill, $64,000 of plant and equipment and an estimate of $18,000 of cash and work-in-progress to be adjusted to true values as at close of business 30 June 2006.
Commenting on the acquisition, VDM Group's CEO, John Farrell, said: "EcOz represents a strategic investment for the VDM Group to expand its presence in the Northern Territory. EcOz is well established having been operating for more than 10 years. Mr Preece has accepted an expanded brief to become VDM Group's Northern Territory and South Australian Regional Manager to take advantage of what we see is an increasingly vibrant region, which is an important and logical gateway to South-East Asia."
"Ms van Oosterzee's role is to develop the EcOz business, not only in the Northern Territory but also in South Australia and to work closely with our existing environmental business Belleng in Perth to better service an ever increasing infrastructure and resources client base."
"Environmental engineering needs a wide composite of skill sets, almost impossible to have in any single office. Both Mr Preece's and Ms van Oosterzee's qualifications and experience perfectly complement the Belleng team and the VDM Group provides EzOz with resources not previously available to it."
"We see EcOz growing significantly and the VDM Group divisions increasing their presence in the region beyond the bio-diesel project which Keytown is constructing in Darwin."
Market Guidance Statement
VDM Group reaffirms that on the basis of unaudited management accounts, the Company anticipates that its forecast profit to shareholders (net profit after tax and before non-recurring items prepared in accordance with A-IFRS statutory) for the 2006 financial year is expected to be achieved.
As disclosed in the Company's prospectus dated 3 January 2006, the Directors forecast a net profit after tax of approximately $5.5 million.
About VDM Group
VDM Group is a multi-disciplined civil and structural engineering and project management business comprising four consulting engineering practices and two contracting companies.
With a workforce of over 350 and offices in Western Australia, Victoria, New South Wales, Queensland and the Northern Territory, VDM Group has extensive coverage of the Australian market as well as being represented in selected international markets.
VDM Group recently completed its initial public offer of $8.2 million, which was heavily oversubscribed. Listing on ASX commenced on 15 February 2006. The Company paid an interim dividend of 3 cents
per share on 15 May 2006. Since listing, VDM Group has acquired the Ewing and EcOz businesses and also announced the awarding of five significant construction and consultancy contracts.
