NRW locks in funds for BGC buy

BGC Contracting at a Whyalla iron ore site.

NRW Holdings has taken little time to secure commitments for the funding it requires to complete a $116.4 million acquisition of BGC Contracting.

The contractor yesterday confirmed it would buy BGC Contracting in a deal that gave the target an enterprise value of $310 million.

NRW has received commitments to place 42.1 million shares in the company at an issue price of $2.85/share to raise $120 million.

The acquisition expects NRW’s mining technologies business to expand, offering services including specialist industrial engineering, shutdown maintenance and fabrication services.

With a combined contract portfolio and order book of approximately $1.5 billion, including $700 million that is scheduled in the 2020 financial year, NRW’s pockets are looking healthy.

NRW chief executive Jules Pemberton said the acquisition was strategically and financially compelling and aligned with the company’s objective to deliver growth across the business and drive shareholder value.

The issue price represents a 1.4 per cent of premium to NRW’s closing price of $2.81 on November 27, and a 5.2 per cent premium to the adjusted 10-day volume weighted average price of $2.71.

“I am extremely delighted with the success of the placement which was strongly supported by investors who share NRW’s enthusiasm for the acquisition of BGC contracting,” Pemberton said.

He added the acquisition represented a value accretive step change in scale and diversity for NRW’s business across Australia.

“We are particularly grateful for the support of our existing shareholders and pleased to welcome a number of new, high quality institutions onto the NRW register,” Pemberton said.

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