)
Queensland-based property manager SSKB Strata is being swallowed by Johns Lyng Group (ASX: JLG) as part of a $57.6 million regional acquisition spree by the integrated building services provider that includes NSW-based air-conditioning group Chill-Rite HVAC.
Through separate deals, Johns Lyng is taking full control of SSKB Strata and 84 per cent of Chill-Rite with both acquisitions said to be immediately earnings accretive for the group.
Johns Lyng has not divulged how much it has individually paid for the acquisitions, but describes them as “strong standalone businesses with significant potential synergies and customer opportunities”.
SSKB Strata, a company established as Stuart Silver King and Burns in 1995 following the merger of Stewart Silver on the Gold Coast and King and Burns on the Sunshine Coast, manages a portfolio of 44,000 strata-title lots across 790 schemes on the east coast as far south as Victoria.
The strata-title property manager is being acquired by Johns Lyng’s Bright & Duggan subsidiary which will boost the group’s portfolio to more than 140,000 lots, cementing its position as Australia’s second-largest strata manager.
Johns Lyng says while the acquisition strengthens Bright & Duggan's position as a leader in the strata sector, it marks a significant step in the business’s strategic growth trajectory.
SSKB’s senior management team will remain with the business following the sale and they have been provided an opportunity to become equity partners in line with Johns Lyng’s partnership model to drive growth.
Chill-Rite, a Dubbo-headquartered provider of heating, ventilation and air-conditioning services in regional NSW, is also earmarked for further growth with Johns Lyng planning to expand the company’s existing footprint in Queensland and Victoria.
Chill-Rite, which was founded in Dubbo in 2007, has been owned and led since 2010 by Luke Robinson who has grown the business to service blue-chip clients in multiple regional markets.
Robinson plans to reinvest a portion of the proceeds from the acquisition into a 10 per cent equity interest in Johns Lyng’s combined Air Control/Chill-Rite business as part of the acquisition.
“We are pleased to add these two strategically important businesses to the group,” says Johns Lyng CEO Nick Carnell.
“Both SSKB and Chill-Rite have strong financials, solid reputations in their respective industries and experienced, growth-minded senior management teams.
“Critically, they are aligned with our core capabilities and will offer additional complementary sales opportunities moving forward.”
Carnell says strata services is a key growth pillar for the group “due to the defensive nature of the earnings and high fragmentation in the sector”.
“The opportunity to introduce better value services and customer solutions across our strata network including repairs and maintenance and improved quality and cost outcomes for customers is compelling,” he says.
“Our focus on organic growth and consolidation has seen us grow to become Australia’s second-largest strata manager and the addition of SSKB’s portfolio strengthens this position and opens up additional growth opportunities across the group.”
The two acquisitions are expected to generate revenue of more than $45 million and EBITDA of about $9 million in FY25.
The $57.6 million acquisition cost will be funded via a $28.8 million cash payment, through the group’s existing revolving credit facility, while the balance will be payable in Johns Lyng shares.
The deals include an aggregate earn-out of up to $15.4 million, contingent on FY25 and FY26 EBITDA targets being met.
The transactions are expected to settle in the first quarter of this financial year.
Enjoyed this article?
Don't miss out on the knowledge and insights to be gained from our daily news and features.
Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.
Support independent journalism and stay informed with stories that matter to you.
)
)
)
)
)
