Northbridge-based engineering and construction company VDM Group Ltd has added to its long list of acquisitions with two more, costing almost $40 million in cash and scrip.
Northbridge-based engineering and construction company VDM Group Ltd has added to its long list of acquisitions with two more, costing almost $40 million in cash and scrip.
The company will acquire Como-based drill, blast and place rock contractor Rocktec Contracting for $15 million, with half to be paid in shares and half in cash.
VDM also acquired Queensland-based construction and civil engineering firm Bellero Constructions for $24.7 million, with $12.3 million worth of VDM shares to be allocated to the vendors. The remaining sum will be paid in cash.
The companyplans to fund the cash components of the acquisitions from internal sources, which are currently being supplemented by a share purchase plan.
The acquisitions are the latest in a long line of VDM purchases, following its acquisition of earthmoving firm Malavoca in September for $45 million in cash and scrip, preceeded by the purchase of Cape Crushing & Earthmoving Pty Ltd, Barlow Gregg & Associates, Wylie & Skene Pty Ltd and Como Engineers Pty Ltd.
The full text of a company announcement is pasted below
VDM Group Ltd advises that it has acquired two businesses
- Bellero Constructions (QLD) Pty Ltd
- Rocktec Contracting
Bellero Constructions is a Queensland-based construction and civil engineering business operating from a head office in Hervey Bay. The purchase consideration is $24.75 million comprising a cash payment of $12.375 and $12.375 in shares. The deemed issue price of the share component is based on a 10 per cent discount to the weighted average VDM Group share price over the 10 business days prior to date of acquisition.
The purchase price of the acquisition was determined and based on 4 times the average earnings before interest and taxation (EBIT) for the financial years to 2007, 2008 and 2009. In the event that these earnings are not achieved the share consideration component of the purchase price will be reduced by $4 for every $1 shortfall in EBIT for FY 2008 and FY 2009. Fifty per cent of the share consideration is to be held in voluntary escrow for 12 months with the remaining 50 per cent held for a 24 month period. Revenue for Bellero Constructions is forecast to be $70 million for the 2008 financial year.
Rocktec Consulting is a Western Australian based company, headquartered in Como. The purchase consideration is $15 million comprising a cash payment of $7.5 million and $7.5 million in shares. The deemed issue price of the share component is based on a 10 per cent discount to the weighted average VDM Group share price over the 10 business days prior to the date of acquisition. The purchase price of the acquisition was determined and based on 4 times the average EBIT for the 2008 financial year. In the event that the FY2008 are not achieved, the share consideration component of the purchase price will be reduced by $4 for every $1 shortfall in the EBIT for FY2008. Fifty per cent of the share consideration is to be held in voluntary escrow for 12 months with the remaining 50 per cent to be held for a 24 month period. Revenue for Rocktec Consulting is forecast to be $15 million for the 2008 financial year.
VDM Group will fund the cash component for the acquisition of Bellero Constructions and Rocktec Contracting form internal sources, which are currently being supplemented by a share purchase plan.
