The Environmental Group Limited (EGL) has revealed its recent purchase of RCR Tomlinson’s energy division cost the company $3 million in cash.
RCR Energy Service was one of several subsidiary companies that RCR Tomlinson put up for sale as part of the company’s administration.
Perth-based RCR Tomlinson entered administration last November due to ongoing money problems, including a large write-down of $57 million following several failed solar farm investments in Queensland.
The company had incurred around $630 million in debts and a massive reduction in its share price by the time of the announcement.
While the sale of RCR Energy to EGL was announced earlier this month, the costs were withheld at the time at the request of RCR Tomlinson’s administrator McGrathNicol.
EGL has carried over all RCR Energy Service staff (including senior management), with RCR Energy Service now operating under a new name, Tomlinson Energy Service.
The acquired company serves as EGL’s fourth business unit alongside Total Air Pollution Control, Baltec Inlet & Exhaust Systems (Baltec IES) and EGL Water.
EGL chairman Lynn Richardson said the acquisition was in line with the company’s growth strategy. Tomlinson Energy Service is considered a key step in the company’s attempt to build a biowaste-to-energy facility.
“The Tomlinson Energy Division is expected to positively contribute to the revenue and profits of EGL,” Richardson said.
“Importantly, the division will provide EGL with a stable revenue stream given the ongoing, repeat nature of the division’s projects and maintenance work.”
RCR Tomlinson and McGrathNicol last week found another buyer in NRW Holdings, which agreed to purchase the mining and heat treatment divisions for $10 million in cash. The transaction is expected to be finalised within the next week.