Calibre snaps up another engineering firm

CALIBRE Group has forked out $A39.2 million and 14.2 million in shares to snap up its second Queensland-based mining service company in three weeks.
Calibre snaps up another engineering firm Calibre snaps up another engineering firm Calibre snaps up another engineering firm Calibre snaps up another engineering firm Calibre snaps up another engineering firm

G&S Engineering provide maintenance services to the underground coal sector

Brooke Showers

Under the acquisition, Calibre will attain 100% of the shares in Queensland coal sector specialists G&S Engineering Services.

The acquisition requires an initial cash and scrip payment of $39.2 million cash and 14.2 million shares. It includes the assumption of G&S’s existing $26.1 million net debt.

A final deferred acquisition payment is anticipated to be $18 million with a floor of $11m, payable upon the achievement of FY13 financial performance milestones by G&S.

Calibre said the cash consideration and assumed debt would be funded from Calibre’s existing debt facilities.

The transaction should be completed by the end of November.

G&S provides operations, maintenance and asset-management services to some of Queensland’s richest mining companies.

Calibre has access to more than 1000 G&S personnel and six facilities across Queensland and New South Wales.

The acquisition should contribute up to $160 million in revenue and $10 million in earnings, before interest and tax, to Calibre’s 2013 financial year results.

G&S will provide Calibre with exposure to more operating mines, and expand its operations and maintenance business streams.

Calibre said G&S was a respected provider to the resources sector of maintenance and shut-down, construction and manufacturing, and electrical engineering services.

It also had established long-term relationships with major coal miners in Australia, including BHP Mitsubishi Alliance, Anglo American, Rio Tinto Coal Australia and Xstrata.

Last financial year, G&S generated revenue of $279 million, with the maintenance and mining division contributing to 58% of this figure.

G&S will continue to operate under managing director Mick Crowe and retain its own brand identity.

Last month, Calibre picked up Queensland-based coal mine engineering and planning specialist Echelon Mining Services.

Echelon specialises in long-term, onsite mine engineering and planning services for established coal mine operators.

Clients include BHP Billiton, Rio Tinto Coal Australia, Peabody Energy Australia, Thiess Australia and the Isaac Plains Coal Joint Venture.

Calibre shares were trading 3.3% higher at $1.02.

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