Perth-based EX Engineering has been acquired by Sydney-based electric goods firm IPD Group in a deal worth $10.2 million in cash and shares.
Perth-based EX Engineering has been acquired by east coast electric goods firm IPD Group in a deal worth $10.2 million in cash and shares.
Established a decade ago, EX will be sold for $9.2 million in cash and $1 million worth of shares in the ASX-listed IPD.
In return, IPD will take on a business that specialises in design, stocking, supply, modification and repair of electrical hazardous area equipment – known in industry as ‘Ex equipment’ – for businesses in oil and gas, mining, manufacturing and agriculture.
The Sydney-based firm highlighted IPD’s adherence to rigorous safety certification criteria, which can present a barrier to entry in the segment, and its desire to expand the EX model to the east coast, as reasons for the deal.
“Using IPD’s national sales force and footprint, we will be able to expand the successful EX Engineering model across Australia from its current base in WA,” IPD chief executive Michael Sainsbury said.
“With EX Engineering in our portfolio, IPD can now supply electrical Ex equipment to our customers.”
The company is certified by the International Electrotechnical Commission System for Certification to Standards Relating to Equipment for Use in Explosive Atmospheres, or IECEx, meaning the equipment it handles is guaranteed to be compliant with standards relevant to industry.
EX founders Warwick and Jenni Greville will remain with the company and lead the expansion of the business into the eastern states. The pair said the deal would allow the company to expand at a faster rate than it could have done alone.
“We are excited by the prospect of expanding the EX Engineering business with the resources and assistance of the broader IPD team,” they said.
“We are pleased our mission to expand this business across Australia can now be achieved in a much faster timeframe.”
EX Engineering generated revenue of $12.4 million and earnings before interest, tax, depreciation and amortisation of $2.5 million last financial year.
“We look forward to working with Warwick and Jenni Greville as well as the rest of the EX Engineering team to grow the business to its full potential,” Mr Sainsbury said
IPD Group shares traded 3.7 per cent higher today, giving it a market capitalisation close to $400 million.