Sydney, April 6, 2006 AEST (ABN Newswire) - Hastie Group Limited (ASX: HST), Australia's leading commercial air conditioning and refrigeration systems group, today announced it has agreed to acquire the business of Gordon Brothers Industries Pty Ltd, Australia's leading industrial refrigeration company.
Gordon Brothers has annual revenue of approximately $45 million and is on target to achieve earnings before interest and tax (EBIT) of $3.5 - 3.7 million for the year to 30 June 2006. The purchase price of $20 million, subject to minor adjustment on completion, represents an enterprise value of between 5.2 and 5.5 times current EBIT.
The acquisition, which is due to be completed on 10 April 2006, will be financed from Hastie's senior debt facilities. It is expected to contribute approximately $0.75 million to Hastie's FY 2006 EBIT after initial integration costs, and increase earnings per share by 8-9 per cent in FY2007.
Hastie's managing director, Jerry Maycock, said: "This is a significant acquisition for Hastie, expanding our refrigeration division into new sectors, diversifying our customer base and broadening our technical skills. Gordon Brothers has an excellent reputation, an impressive record of organic growth and a strong management team, and there is significant potential to increase its share of the industrial refrigeration market and take advantage of new industry and geographic opportunities.
"Recurring revenue from maintenance and spare parts generates approximately 60 per cent of earnings; and the business has a wide, blue-chip customer base, with no customer providing more than 10 per cent of total revenue. This is a style of business that Hastie is comfortable with, whilst opening up new markets."
Gordon Brothers was founded in 1917 and designs, manufactures and installs large scale refrigeration plants that generate freezing and chilling capability for a wide range of industries, including meat and food processing, petrochemicals, soft drinks, brewing, wine and underground mining. Its principal market is Australia, but it has a growing business in the UK, currently focusing on the brewing sector, and has undertaken projects in South-east Asia. The business has wide experience of 'non ozone depleting' refrigerants and highly energy efficient systems, which are increasingly required by customers. Further information can be found at www.gordonrefrig.com.au.
Gordon Brothers' headquarters are in Melbourne, and it has a manufacturing operation at Bendigo, Victoria. It also has service centres in all Australian mainland states, a subsidiary in Lincoln, UK, and a joint venture in Kuala Lumpur, Malaysia. It has 124 employees and will operate as a separate business unit within Hastie's refrigeration division.
Gordon Brothers' general manager, John Mott, said: "With the resources of Hastie, we expect to be able to capitalise on further growth opportunities, both in Australia and in the European and South-east Asian markets. We are also excited by the potential to expand the range of products and services we offer our customers."
Hastie Group Limited has grown over 35 years from a Sydney air conditioning business into the leading commercial and industrial air conditioning and refrigeration systems group in Australia and New Zealand. It has 1,500 employees based at 33 locations. Its customers include many of the largest building/facility owners and managers, construction companies, shopping centre groups, and supermarket chains. For more information, visit www.hastiegroup.com.au.
Contact
Hastie Group Limited
Jerry Maycock
TEL: +61 2 9714 2180
Media enquiries
Ben Jarvis
Financial & Corporate Relations (FCR)
TEL: +61 2 8264 1003 or 0413 150 448
FCR -- Financial & Corporate Relations Pty Limited
TEL: +61 2 8264 1005
Main: +61 2 9235 1666
Fax: +61 2 9235 1920
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www.fcr.com.au
email: f.ross@fcr.com.au
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