Viento plans $21m HVLV acquisition

Contractor Viento Group plans to broaden its range of services with the purchase of Hazelmere-based switchroom manufacturer HVLV in a prospective deal worth up to $21 million.

Viento told the market on Thursday it had agreed to purchase all of HVLV's issued securities based on an enterprise value of $21.3 million, subject to shareholder approval. 

The value of the transaction is clouded by a number of conditions on the deal.

Viento's consideration includes a $3 million cash payment, deferred until March 2015.

It will also issue 23.6 million convertible notes over three tranches, 7.9 million ordinary fully paid shares and the assumption of HVLV's core bank facilities.

Viento will become a guarantor of HVLV's $8 million bank loan facility and acquire HVLV's shares on an ex-dividend basis, with a $7 million dividend being declared pre-acquisition.

HVLV achieved revenue of $44 million in the 2013 financial year.

Its revenue contribution to Viento for the six months to 30 June 2014 is expected to be in excess of $35 million.

"HVLV represents a fantastic opportunity to enter this specialised market via a proven performer and market leader," Viento executive chairman Ray Munro said.

"My vision is to build HVLV into a company which offers an increased level of construction and electrical solutions to its existing customer base."

HVLV managing director and controlling shareholder Steve de Mol will join Viento's board with immediate effect.

Mr De Mol founded Action Mining Services in 1989 and sold the business to NRW Holdings in 2007.

He said he saw a number of opportunities for HVLV to secure additional work and extend its capabilities with the support of Viento.