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SRG GLOBAL LIMITED — M&A Activity 2017
Apr 9, 2017
65852_rns_2017-04-09_cb3e8a9e-f939-4273-b918-c2f86eac6336.pdf
M&A Activity
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ASX MEDIA ANNOUNCEMENT
10 April 2017
GCS TO ACQUIRE 100% OF SUMMIT BUSINESS AND ASSETS
Construction Services group Global Construction Services Limited (ASX: GCS) today announces it has signed a business sale agreement and conditional offer to acquire 100% of the business and assets of Melbourne based Summit Formwork (Aust) Pty Ltd and Summit Investment Services Pty Ltd (Summit) for $18.4m.
Summit has been in business for 10 years and is a leading provider of construction services specialising in formwork, concereting and reinforcement to major commercial, residential, and retail development projects in Victoria. The company has a strong market position and is highly regarded in the construction services market.
The acquisition of Summit is part of GCS’s ongoing strategy to expand and diversify its operations outside of the Western Australian market and increase exposure to the commercial construction sector on the east coast of Australia.
Group Managing Director of GCS Enzo Gullotti said “The acquisition represents another significant step in progressing and delivering on GCS’s strategic priorities which includes building a strong presence on the east coast of Australia. The Summit business is well aligned and complements GCS’s core business. It also provides us with a platform to target and pursue other synergistic opportunities.”
Summit is to be acquired by GCS for a total transaction consideration of $18.4m, on a debt and income tax liability free basis. This comprises $7.4m in cash up front, $5.5m in GCS scrip (subject to voluntary escrow provisions), with the balance of $5.5m subject to a cash earn-out arrangement based on achieving EBITDA targets over the next three years ranging between $4.3 million and $6 million per annum. The acquisition is expected to be strongly earnings per share accretive in FY18.
Completion of the acquisition is expected to occur in May 2017, subject to satisfying all of the conditions precedent, including final approval by the GCS Board.
Commenting on the transaction, Mr Aidan O’Connor said “This is an important step forward for the Summit business. It will open up significant new opportunities for the business and our customers, and will allow us to grow to another level. It also provides all of our employees within the business greater career development opportunities as part of the broader GCS Group.”
-ENDS-
ABOUT GCS
The GCS Group is an Australian construction and maintenance services company that offers a diverse range of integrated products, services, and solutions covering the Infrastructure; Energy; Oil & Gas; Resource & Industrial; Commercial; and Residential sectors. The GCS Group’s strategy for growth is to continue to capitalise on opportunities in the sectors it currently services, explore new markets and products, diversify into related industry sectors, and acquire selected new businesses that create value for shareholders.
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ASX MEDIA ANNOUNCEMENT
10 April 2017
GCS TO ACQUIRE 100% OF SUMMIT BUSINESS AND ASSETS
Further Information:
Enzo Gullotti Group Managing Director Ph: +61 8 9479 7990 E: [email protected]
Greg Slade Investor Relations Ph: +61 488 917 882 E: [email protected]
Or Visit: http://www.gcs-group.com.au
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