LogiCamms Limited (LCM) has reached agreement to acquire MPA Consulting Engineers (Australia) Pty Ltd, expanding its range of services and its ability to deliver larger, more complex projects. MPA is an established, multi-discipline engineering firm that specialises in providing civil, structural and mechanical engineering design services, complementing LogiCamms’ existing electrical, control and process engineering specialist business. MPA boasts a blue chip client base across the oil & gas, mining, energy and infrastructure sectors. The acquisition provides LogiCamms with new capabilities and services, which will drive revenue diversification and present new growth opportunities. The acquisition is expected to be earnings per share accretive and is expected to lift the revenue and profit of the LogiCamms group by approximately 25%. It is expected that the acquisition will add up to $60m in new project opportunities to the LogiCamms sales pipeline. LogiCamms anticipates that MPA will deliver (on a normalised, annualised, standalone basis) earnings after tax of between $2m and $2.4m for FY2010.
LogiCamms Managing Director Adam Keats said the MPA acquisition was an important step in LogiCamms’ growth strategy. “We are confident that this acquisition will drive considerable national and international growth opportunities for LogiCamms, and allow the company to further consolidate its position in the Australian market,” he said. “We will be able to leverage our existing customer base to take on larger and more comprehensive engineering projects, effectively increasing LogiCamm’s value proposition to existing and new clients. “We have had a long standing working relationship with MPA and we are excited about the opportunity to integrate the MPA business, to further reinforce LogiCamm’s position of leadership in the Australian market place.” Mr Keats said the combination of LogiCamms’ operational experience and the combined group’s engineering design and construction experience would provide considerable expertise for clients requiring services for turn-key projects.
The total acquisition price of approximately $10.8 million consists of $5 million in cash and the issue of approximately 6.8 million new shares to the owners of MPA at an issue price of 85 cents per share. The shares issued to the owners of MPA will be subject to a voluntary escrow of 6 months. In addition, LogiCamms will issue up to 700,000 unlisted options to employees of MPA pursuant to LogiCamms’ Executives and Employee Share Option Plan. The board is considering a number of options in relation to the cash component of the consideration. These options include utilising existing cash reserves, bank funding, new equity capital or a combination of each. The board will work with its advisors over the coming weeks to determine the optimal funding approach and will keep the market informed of its decision. Transaction costs are estimated to be $350,000 and integration costs of approximately $300,000 are likely be incurred over the 12 months following settlement.
MPA provide professional engineering services to both small and large companies in the oil & gas, mining, power, chemical and metallurgical industries. With a workforce of approximately 75, MPA has the capability to provide civil/structural, mechanical, electrical and instrumentation and process engineering services, and can undertake project work, including feasibility studies, capital and operating cost estimates, economic evaluations, detailed design, project management and commissioning. LogiCamms’ vision is to be a Market Leader delivering Outstanding Customer Solutions. It operates in the resources, energy and infrastructure sectors providing project and specialised engineering services that improve the value and productivity of operational assets. It works both directly with its customers and various engineering consultants, constructors and original equipment manufacturers. It is headquartered in Perth, Western Australia and has 8 offices in Australia including Brisbane, Melbourne and Adelaide.
www.logicamms.com.au
