NRW Holdings has confirmed it will buy BGC Contracting in a transformational deal that gives the target an enterprise value of $310 million.
This acquisition is expected to support NRW’s mining technologies business with an expanded capability and service offering, including specialist industrial engineering, shutdown maintenance and fabrication services.
BGC Contracting provides services to the resources, energy and infrastructure sectors across its mining, construction and DIAB Engineering businesses.
It has an existing contract portfolio and order book of around $1.5 billion, including around $700 million that is scheduled for delivery in the 2020 financial year.
Together, the two contractors have a combined order book of around $4 billion, with $2.2 billion of work scheduled for delivery in the current fiscal year.
NRW chief executive Jules Pemberton said the acquisition aligned with the company’s objective to further diversify its revenues and enhance shareholder returns.
“BGC Contracting has a well-recognised and proud history built around the strong foundations set by the late Len Buckeridge,” Pemberton said.
“With an excellent track record supported by diversified earnings base, extensive fleet and a long history with several high-profile clients, the acquisition is strategically and financially compelling and aligns with NRW’s objective to deliver growth across the business and drive NRW shareholder value.”
BGC Contracting runs a fleet of over 200 pieces of mobile mining equipment valued at more than $200 million. Its clients have an option to acquire the fleet that is used to provide the contract services.
“Together with our combined workforce of around 6000 people supporting more than one hundred projects around Australia, we are well placed to offer a diverse range of services and project solutions to clients across the infrastructure, resources, industrial engineering, maintenance and urban sectors,” Pemberton said.
NRW will acquire BGC for an equity value of $116.4 million, which it will fund via a fully underwritten placement to raise $120 million.
The contractor will offer a share purchase plan capped at $10 million to eligible shareholders.
NRW has also secured contract bonding through bank facilities and surety providers to support the transaction.