SYDNEY: Verbrec Limited’s wholly owned subsidiary Competency Training is to acquire the Australian training business of Site Skills Group Pty Ltd (SSG), a wholly owned subsidiary of Site Group International Limited.
Verbrec understands this transaction is part of Site Group’s plans to rationalisation its Australian businesses and focus on its international operations.
The acquisition of Site Skills Training is by way of an asset purchase and includes all training sites, materials and equipment, database of approximately 110,000 students, Site Skills Training domain and trading names.
Consideration of $1.44 million will be paid in cash on closing of the acquisition which is expected to take between four and six weeks dependent on certain conditions precedent being met.
This includes offers of employment to selected Site Skills employees being accepted. Other financial aspects of the transaction include $500,000 paid in cash on SSG satisfying a condition subsequent; $1 million paid in cash if Competency Training’s aggregated FY22 revenue exceeds $18 million.
A part payment will be made if it is above $12million and $1.5 million paid in cash if Competency Training’s aggregated FY23 revenue exceeds $20million. A part payment will be made if it is above $12million.
From completion of the acquisition, Site Skills will continue to trade but under Competency Training’s Registered Training Organisation (RTO) designation.
Competency Training’s RTO designation has been expanded such that it is able to provide both the Site Skills generalist training and its specialist training with a continued focus on the mining & resources, oil & gas, construction & engineering industries.
The transaction has been structured as an Asset Sale (as opposed to a Share Sale) so as to achieve immediate operational and financial synergies and to avoid the ongoing litigation between SSG and the Australian Skills Quality Authority (ASQA).
Whilst the transaction is to be funded from existing cash reserves and bank debt the Board constantly monitors and reviews balance sheet strength with a view to pursuing further growth opportunities.
The acquisition of all operational assets of Site Skills represents a significant growth opportunity for Competency Training and is fully aligned with Verbrec’s refocused strategy of diversifying its revenue stream sources and bolstering sub-scale business units to achieve scale and overhead synergies.
On the acquisition, Linton Burns, Verbrec’s Managing Director commented: “Competency Training’s acquisition of Site Skills assets is a milestone achievement for the Company and provides the opportunity for significant growth of our training business. Over recent months we have worked tirelessly to implement our refocused growth strategy and ensure each service line has scale operations and delivers solid ongoing revenue and margin growth. Both this transaction and the recent acquisition of EIM are testament to that”.
Verbrec Limited is a leading mid-tier engineering, operations and training services company that supports customers across Australia, New Zealand, PNG and beyond.