SYDNEY, AUSTRALIA: SRG Global Ltd (ASX: SRG) has entered into a binding agreement with ALS Industrial Holdings, a subsidiary of ALS Ltd, to acquire 100% of the issued shares in ALS Industrial (ALS Asset Care) for A$ 80 million.

Asset Care is a 100%-owned subsidiary of ASX-listed ALS Ltd (ASX:ALQ) and specialises in asset integrity and reliability services with core end-markets in mining, oil & gas, energy, infrastructure and utilities.

Asset Care has been operating for 65+ years and employs 600+ people, with sites located across Western Australia, Victoria, New South Wales and Queensland, and a 70% East / 30% West geographic split.

Asset Care provides a broad range of services, including integrity & reliability engineering, inspection, testing, condition monitoring and certification. Asset Care is expected to deliver FY23E revenue of A$135 million and EBITDA of A$15.4 million, prior to realising any revenue or cost synergies.

Asset Care is highly complementary to SRG’s existing business. It is also consistent with SRG Global’s stated strategy of delivering step change growth in recurring Asset Maintenance Services and completing the asset management lifecycle by adding capability and expertise in front-end inspection and testing.

Commenting on the acquisition, SRG Global Managing Director, David Macgeorge, said: “A combined SRG Global and Asset Care brings together two highly complementary market leading businesses that enhance and accelerate the combined group’s growth ambitions.

“Asset Care is a business that we have followed for some time and see a significant opportunity to create value by combining our complementary asset maintenance services, portfolios of tier-1 clients, core end markets, strategic locations Australia-wide, and market leading technologies and systems.

Importantly, the acquisition will enhance SRG Global’s capabilities to provide a full end-to-end asset lifecycle sustainability solution, strengthening our offering to clients and re-enforcing our market leading position in asset sustainability services.

“SRG Global has maintained prudent financial discipline in relation to the transaction, with the acquisition expected to be accretive on an FY23E EPS (A) basis (before any revenue or cost synergies) and funded with a mix of equity, debt and cash to ensure we maintain a strong balance sheet.

“We acknowledge the expertise and professionalism of Asset Care’s 600+ employees and the significant amount of work undertaken, alongside ALS Ltd, to grow the business into the market leader it is today. We are delighted to welcome the Asset Care team to the SRG Global family and look forward to the exciting future that lies ahead for the combined Group.”