Perth-based Vysarn is raising $65.3 million to help fund the acquisition of local firm Welltech, just weeks after completing another acquisition in the water services industry.
Vysarn will pay up to $60 million in cash and shares to acquire Canning Vale-based Welltech.
That comes after it paid $50 million last month for Hazelmere-based Newground Water Services.
In both cases, the full payment is subject to meeting earnings targets over three years.
Managing director James Clement said the acquisitions would be transformative for Vysarn.
“These new businesses perfectly complement our existing, integrated water business which spans industrial, advisory, technology and asset management segments,” he said.
To support its growth, Vysarn will raise $65.3 million through the issue of new shares at $1.05 per share – a very small 0.5 per cent discount to the last trading price.
Of this amount, $37.25 million will be paid upfront to the current owners of Welltech.
Up to $10 million will be set aside to fund the ongoing development of the Kariyarra water scheme towards a final investment decision.
The scheme is a joint venture with Kariyarra Aboriginal Corporation to supply water to the Port Hedland region.
The balance will be used to bolster working capital and meet transaction costs.
The upfront payment for Welltech will comprise the $37.25 million in cash and $12.75 million in shares.
Vysarn said the upfront consideration equates to 3.6 times Welltech’s expected EBITDA in FY26.
Vysarn will issue a further $5 million in cash and $5 million in shares over three years, subject to Welltech meeting earnings targets over that period of time.
Welltech, led by executives David Henderson and Zak Haines, has been operating since 1995 and counts Melbourne Water, Fulton Hogan, NRW Holdings, BHP and Water Corporation as clients.
Its core business units are construction water infrastructure, sewerage and wastewater bypass operations and drilling.
Newground, led by Peter Scotford and Bruce Scarterfield, was established in 2018 and specialises in the design, construction and maintenance of industrial-scale irrigation systems.
Mr Clement said both acquisitions were earnings accretive, with aligned management and a capital-light business model.
“These acquisitions provide Vysarn with broadened and more diverse portfolio of high-quality clients, positioning us to deliver additional stable, long-term earnings growth for shareholders.”
Sydney-based Unified Capital Partners is lead manager and underwriter for the capital raising, with Candour Advisory and Thomsons providing financial and legal advice.
