SYDNEY, AUSTRALIA: AVADA Group Limited (ASX: AVD), a leading traffic management operator in Australia and New Zealand, has announced that it will acquire STA Traffic Management, one of the top five traffic management companies in Victoria.
The acquisition will strengthen AVADA’s presence and market share in Victoria, as well as diversify its client base in the infrastructure and utilities sectors.
The acquisition is valued at $8.5 million, which is 3.0 times the normalised EBITDA of $2.8 million that STA Traffic Management reported for FY23.
The acquisition will be funded by a combination of an institutional placement of $5.74 million and a conditional placement of approximately $1.26 million, both at $0.60 per new share.
The acquisition is expected to be completed by the end of September 2023 and to increase AVADA’s earnings and earnings per share.
This is AVADA’s third acquisition in less than 2 years, as part of its strategy to expand across Australia and New Zealand and maintain its leadership position in the traffic management industry.
The acquisition will also bring synergies and integration benefits through resource allocation and back office efficiencies.
AVADA Group acquires NZ’s largest traffic management company, Wilsons TM Limited