Southern Cross Electrical Engineering Ltd (SXE) today announced the execution of an agreement to acquire Queensland based electrical and instrumentation specialist, Oceanic Industries Pty Ltd (“Oceanic”). To date Oceanic has focussed on the coal seam gas (“CSG”) market and retains a blue-chip customer base including: QGC, Origin, Santos, Arrow and Cougar. In addition to servicing the CSG market, Oceanic undertakes electrical and instrumentation installations as a preferred contractor to the BP and Caltex refineries in Queensland.
Oceanic’s revenue for FY09 was $12.9m which delivered normalised earnings before interest, tax, depreciation and amortisation of $3.0m. The acquisition price is $12.4 million and will be funded through a combination of existing cash reserves ($3.4m), equity ($4.0m) and debt ($5.0m) with settlement expected to be finalised on 26 February 2010. The acquisition will be immediately EPS accretive.
SXE Managing Director, Mr Stephen Pearce said “SXE welcomes the team from Oceanic to the SXE Group and looks forward to substantially growing the Oceanic business. This acquisition presents a strong strategic fit with SXE’s acquisition criteria and will augment the pursuit of a range of SXE’s key growth objectives, particularly:
- Oceanic provides an excellent platform to grow SXE’s overall presence in the Queensland market.
- It further expands SXE’s presence in the growing energy sector.
- Provides organic revenue growth opportunities – SXE to strengthen its footprint in the Queensland power line and mining electrical construction markets that Oceanic currently does not participate in.
- Existing Oceanic senior management team to strengthen SXE’s skill base in the Oil and Gas sector – specialised capability in Hazardous areas.
- Strengthens tendering capability for key Queensland based contracts.
SXE is currently finalising the results for the first half and expects to report an underlying consolidated net profit after tax result of between $4.5m and $4.8m from revenue of $38.8m.
Tags: engineering, New acquisition, Southern Cross Engineering, SXE
