Engineering company RCR Tomlinson (ASX: RCR) has plans to acquire fellow ASX-listed engineering firm Norfolk Group (ASX: NFK) in a A$62 million all cash takeover.
The two companies have inked an exclusive deal which will see RCR acquire 100% of the shares in Norfolk for an indicative price of $0.38 per share. Norfolk shares were last trading at $0.45.
The total cash consideration has been calculated based on an assumed net debt position of Norfolk of not more than $78 million.
Norfolk’s major shareholder, Maui Capital, has already confirmed its intention to vote in favour of the takeover.
Norfolk’s business generates around $1 billion in annual revenue and will deliver greater diversification of revenues across RCR’s end markets.
The proposed acquisition will also provide RCR with access to infrastructure markets, particularly those requiring significant technical intellectual property.
RCR had around $53.5 million in cash at the end of December 2012, and a net tangible asset backing of $1.17 per share.
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