NRW Holdings Ltd (ASX:NWH) has made a transformational acquisition of Golding Group Pty Ltd for an enterprise value of $85 million, which represents a 1.6x EV/EBITDA multiple-based on Golding FY17 EBITDA of $53 million.
The acquisition metrics are attractive with $275 million of work scheduled for delivery in FY18 and high cashflow conversion, Golding is highly complementary to NRW’s existing business.
The acquisition is also expected to be earnings per share accretive – over 60% on a pro forma FY17 basis.
The deal will be funded by a new $48 million acquisition debt facility, a $25 million equity placement and existing cash reserves.
The placement bookbuild will have a floor price of $0.64 and a maximum price of $0.68.
NRW will also offer a share purchase plan to raise up to $5 million.
The acquisition fits
The acquisition provides a strong strategic fit by adding significant scale through an expanded service offering with Tier 1 clients.
It also unlocks further potential opportunities to pursue large-scale upcoming infrastructure and resource projects across Australia.