- LaserBond (LBL) will acquire fellow surface engineering company, United Surface Technologies, for $1.1 million
- United Surface Technologies provides advanced thermal spray coating and weld hard-facing services that compliment LaserBond’s laser cladding technology
- The acquisition includes management, facilities and equipment, contracts, leases and licences, and trading names
- While LaserBond has been minimally impacted by COVID-19, it’s expecting FY20 revenue to be between two and 2.5 per cent less than FY19
- Company shares are up five per cent and trading for 42 cents each
LaserBond (LBL) has entered a memorandum of understanding to acquire surface engineering company, United Surface Technologies, for $1.1 million.
United Surface Technologies is known for providing the industry with an advanced thermal spray coating and weld hard-facing service. This is set to compliment the LaserBond laser cladding technology.
It also has a 34-year history, which has led to an extensive client base across the power generation, rail, paper, oil and gas, mining, and general manufacturing sectors.
The acquisition includes all staff and existing management, plant and equipment, ongoing contracts, leases and licences as well as trading names. LaserBond will pay the $1.1 million through existing equipment financing facilities and cash reserves.
“The acquisition of a facility from which to expand our footprint in Australia exemplifies our strategy to acquire complementary businesses that provide skilled personnel and equipment with an existing client base whilst providing a platform for LaserBond cladding technology in expanded markets,” CEO Wayne Hooper said.
COVID-19 impact
Unlike many businesses, LaserBond’s revenue has only been slightly impacted by COVID-19.
While FY20 revenue from the core products and services divisions is expected to increase by eight to 8.5 per cent since FY19, sales in the technology division and the acceleration of growth in international product sales have been impacted by international travel restrictions.
Importantly, the company received significant orders in late May however, due to the time, the revenue won’t be recognised until the first half of 2021.
As a result, LaserBond now expects FY20 revenue to be between two and 2.5 per cent less than the revenue in FY19.
On a positive note, the board is pleased with the business’s growth and still considers the targeted $40 million revenue by 2022 to be a realistic goal. This is subject to the COVID-19 travel restrictions easing.
Company shares are up 5 per cent and trading for 42 cents each at 2:07 pm AEST.