SYDNEY, AUSTRALIA: Acrow Limited (ASX: ACR), a leading provider of formwork and scaffolding solutions, has announced that it has signed a binding agreement to acquire MI Scaffold Pty Ltd, a leading provider of industrial scaffolding, access and rigging services in North and Central Queensland. The deal is valued at $36.4m on a cash-free, debt-free and normal level of working capital basis.
The acquisition will consist of $26.4m in upfront consideration and up to $9.9m in deferred consideration based on future financial performance. The upfront consideration implies a multiple of -4.0x EBITDA (based on an FY21-23 normalised average EBITDA of -$6.6m).
MI Scaffold was founded in 2012 and has about 180 employees and a highly recurring customer base. The company offers end-to-end solutions for industrial scaffolding, including design engineering, labour and equipment. It has a state of the art Layher scaffolding fleet, which is known for its complex and high-quality projects.
The acquisition will significantly enhance Acrow’s industrial services division and provide greater recurring maintenance revenue. It will also bolster Acrow’s market position in North and Central Queensland and provide a platform for national industrial services growth.
The acquisition and associated transaction costs will be funded through a combination of a $15.0m equity raising via an institutional placement at $0.80 per share, representing a 7.0% discount to last close, and $15.0m newly expanded Westpac debt facilities, which will also provide broader balance sheet flexibility and support for Acrow’s ongoing growth.
The acquisition is expected to be high-single digit EPS accretive on an underlying, pro-forma basis, before inclusion of any synergies. The pro-forma net debt / EBITDA ratio will be 0.8x.
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