Electrical engineering and control systems company, LogiCamms Ltd, is set to acquire Queensland-based Paterson Flood Engineers Pty Ltd and Competency Training Pty Ltd, for a total consideration of up to $12.1 million.
Electrical engineering and control systems company, LogiCamms Ltd, is set to acquire Queensland-based Paterson Flood Engineers Pty Ltd and Competency Training Pty Ltd, for a total consideration of up to $12.1 million.
PFE and CT combined have forecast 2008 revenues of approximately $13.5 million and an NPAT of $1.7 million.
The purchase consideration for the two companies will be in the range of $11.9 million to $12.1 million and will be settled 30 per cent in cash, with the remaining 70 per cent through the issue of LogiCamms Ltd shares.
West Perth-headquartered LogiCamms said the merger would substantially improve its capacity and capability to service the resources sector.
In addition to PFE's significant Queensland operations, the company has a strong record of successfully executing projects in Asia as well as the Americas and Europe.
LogiCamms said its Queensland team would be significantly strengthened by the depth of experience and capability provided by PFE's 65 staff located in Queensland and it believed the merger now positioned the company as Australia's leading specialist electrical engineering and control systems company.
Established for just over 2 years, CT is a technical training firm providing specialised training in hazardous areas and high voltage systems for the resources and oil and gas sectors.
LogiCamms' national infrastructure will provide an excellent foundation on which to grow CT into a national accredited training organisation providing industry leading technical training courses.
This acquisition is considered strategic, placing LogiCamms in a position of technical leadership with a niche offering into its target markets, namely resources, energy and utilities.
PFE, meanwhile, is an established specialist electrical engineering and control systems firm delivering project services primarily in Queensland and also has significant project experience throughout Australia and overseas.
CT was a business formed by PFE shareholders to meet a market demand for specialised technical training in the field of hazardous areas and high voltage engineering.
The two businesses have combined staff of 65 providing specialist project engineering and technical training services respectively.
The acquisition consolidates LogiCamms' presence in the expanding Queensland market, whilst providing niche technical offerings which can be leveraged by the LogiCamms group on a national basis.
LogiCamms said it will work to leverage PFE's considerable international project experience to secure off-shore project opportunities.
The majority of the owners and all executive directors of the businesses will be retained on employment contracts for a minimum period of 3 years with non-compete provisions.
In addition, Chris Kerrison (PFE's managing director) and Terry O'Brien (PFE's manager - Mackay Office) will join the LogiCamms group executive.
Mr Kerrison will be appointed as LogiCamms' general manager - Queensland.
Concurrent with the merger, Dr Chris Greig, a long term advisor to PFE and CT's boards, will be joining the LogiCamms board. He is currently a director of several private companies and is the chairman of Western Metals Ltd.
Further, LogiCamms has an approved offer of funding facilities from the NAB to complete the transaction, however the board will further consider the preferred funding source for the transaction prior to settlement which is expected to occur in mid April 2008.
The final settlement price will be determined in part by the net tangible asset position of the companies as of February 29, 2008.
The issue price of the shares is to be $1.10, representing a 10 per cent discount (approx) to the volume weighted average price over the past 20 trading days.
It is anticipated the acquisition will be earnings per share accretive. The effective acquisition date is February 29, 2008.
The LogiCamms Ltd shares will be issued subject to shareholder approval of the transaction, at a general meeting to be called for early April 2008.
In other news today, LogiCamms reported a net profit of $295,216 after tax on revenues of $2.8 million for the month of December 2007. The limited period was due to the company's listing on December 11 2007.
LogiCamms now has 7 offices throughout Australia, located in Perth, Brisbane, Adelaide, Darwin, Gladstone, MacKay and Whyalla.
