- Engineering company Verbrec (VBC), formally known as LogiCamms, has agreed to purchase Energy Infrastructure Management (EIM) for just over $10 million
- EIM is a Queensland-based infrastructure services company which is jointly owned by AGL Energy (AGL) and Arrow Energy
- Verbrec believes the purchase is highly strategic and adds to its existing business units
- It’ll make the purchase in cash and is expected to close the deal before the new year
- On the market this morning, Verbrec is in the grey and trading at 26.5 cents per share
Verbrec (VBC), formally known as LogiCamms, has agreed to purchase Energy Infrastructure Management (EIM) for just over $10 million.
EIM is a Queensland-based infrastructure services company, jointly owned by AGL Energy (AGL) and Arrow Energy.
The mid-tier engineering company says the purchase is highly strategic and adds to its existing business units.
Verbrec will make the purchase in cash and fund it via existing cash reserves. The transaction is expected to close by the end of 2020.
Under the agreement, Arrow has agreed to extend an existing pipelines, operations and maintenance contract for a further three years.
Notably, the deal includes significant franking credits which Verbrec can use when dividends are reinstated.
Verbrec’s Managing Director, Linton Burns, says this a transformational purchase for Verbrec and is one of the first stages of the company’s refocused growth strategy.
“EIM is a leader in the Australian engineering sector with a number of large tier-one customers. It adds scale and capability to our existing Pipelines business unit and is expected to integrate into this business unit seamlessly,” he said.
“Not only is this acquisition a good bolt on to an existing business unit, it also grows our recurring revenue streams as a significant portion of EIM’s revenues come from long-dated contracts. This adds to our sustainability and diversifies our revenue base,” he added.
On the market this morning, Verbrec is in the grey and trading at 26.5 cents per share at 10:02 am AEDT.