SYDNEY, AUSTRALIA: WestStar Industrial Limited (ASX:WSI), a diversified industrial group with businesses in engineering, construction, manufacturing and mining services, has agreed to acquire the business and assets of WATMAR, a fluid system engineering specialist predominantly operating within defence, industrial and marine industries.
The acquisition was executed through a wholly-owned subsidiary, Watmar Engineering Pty Ltd, which was newly established for the purpose of the transaction. WestStar will pay WATMAR upfront consideration of $1.4 Million from existing cash reserves, which represents a 1.4x multiple of WATMAR’s underlying EBITDA in the preceding 12 months of -$1 Million.
WestStar said that the acquisition is a strategic industry move that will allow it to enter the high barrier to entry defence sector with additional significant upside and potential for growth through complimentary offerings to its existing businesses. The acquisition is expected to be immediately earnings per share accretive, not including the expected synergy benefits.
WATMAR was established in 1989 and has developed a sound reputation in the Australian marine and defence sectors as a fluid system engineering specialist. WATMAR is headquartered in Naval Base, Western Australia and operates from Perth, Darwin and Sydney, providing four main business lines: Fluid Systems and Equipment, Engineering Services, Engineering Contracting and Asset Management Services.
WATMAR’s strong and long-standing client base consists principally of government and large-scale enterprises in both the public and private sectors, including The Australian Government Department of Defence, BAE Systems, Serco Group, Babcock Australasia, Luerssen Australia and Woodside Energy.
WATMAR worked closely with and alongside WestStar subsidiary Alltype Engineering in the 1990s undertaking extensive defence and naval maintenance and modification works with the two businesses having complimentary service offerings. This working relationship remains in place 20+ years later.
WestStar Industrial’s Managing Director Robert Spadanuda said: “We are delighted to welcome WATMAR to the WestStar group. This acquisition is a significant milestone for us as it provides us with a fast entry into the defence sector, which is one of our key strategic growth areas. WATMAR has a proven track record of delivering high-quality fluid system engineering solutions to some of the most demanding clients in the industry. We believe that by combining our capabilities and resources, we can create a stronger and more competitive offering for our customers and stakeholders.”
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