Cardno Limited (CDD) today announced the highly strategic acquisition of Australian Underground Services Pty Ltd (AUS), an Australian based utility detection and mapping services firm with around 30 staff based in Victoria.
AUS is expected to contribute revenue of around AU$5 million to Cardno annually. Cardno will pay AU$6.0 million for AUS on an enterprise value basis plus an earn out of up to AU$1.0 million if calendar year profit targets are achieved. AUS is expected to deliver EBIT of around AU$1.7 million for FY11. The effective date for the transaction will be 1 April 2010 and it is immediately earnings per share accretive.
AUS brings to Cardno a utility detection and mapping services business which undertakes services location through surface geophysical technologies, state of the art non-destructive vacuum excavation and data management services.
“Further developing our services locating business is a strategy that Cardno has been targeting since the acquisition of Cardno TBE in late 2008” said Cardno Managing Director, Andrew Buckley. “The acquisition of AUS will allow us to transfer our professional subsurface utility engineering (SUE) global expertise from Cardno TBE, based in Tampa Florida, to Australia and leverage off AUS’s existing client base. Cardno TBE has already successfully achieved this in Canada and the UK”.
The acquisition will be funded with an approximate mix of 75% cash and 25% shares. Initially, around 375,500 shares will be issued at a price of $3.99477. The cash component will be funded from available cash reserves.
Mr Buckley said that Cardno’s balance sheet remains strong following the acquisition and the company continues to focus its strategy to grow organically and by acquisition. “We see further strategic opportunities for Cardno through our M&A pipeline this year,” he said.
Tags: Cardno, CDD, Construction Services, New acquisition
