Cardno finds Texan star with $77m acquisition

Infrastructure and environmental services group Cardno (ASX: CDD) has come out of a trading halt to announce an agreement to acquire Texan engineering services firm Raba Kistner Inc for US$55 million ($77 million).

With 470 staff, Raba Kistner specialises in construction materials testing, geotechnical engineering consulting, project management and independent quality assurance and inspection.

The Texan group mostly caters to transport infrastructure projects, government and commercial clients, and will become part of Cardno's construction sciences division

The figure includes an upfront purchase price of US$42.5 million ($59.3 million) with $12.5 million ($17.4 million) of additional performance linked payments due over the next three years, with the acquisition effective as of 30 November 2018.

Cardno expects the purchase will significantly increase its construction sciences' geographic footprint, with managing director Ian Ball claiming it is in line with Cardno's growth plan through conservatively funded 'on strategy' accretive acquisitions.

"Construction Sciences is the leading Construction Materials Testing business in Australia, and with the acquisition of Raba Kistner, we have acquired a similar high-performing business headquartered in Texas," says Ball.

"We look forward to working with the Raba Kistner management team to continue to grow the business in Texas and beyond in the coming years."

With the acquisition, Cardno director Mr Neville Buch will remain on the Cardno board and will join the board of Raba Kistner.

Raba Kistner earned a normalised US$58.5 million ($81.6 million) of net revenue and US$7.1 million ($9.9 million) of EBITDA in the 12 months to September 2018.

The acquisition is expected to contribute approximately US$3.8 million ($5.3 million) in EBITDA to Cardno's FY19 results.

Business News Australia