)
Diversified infrastructure services provider SRG Global (ASX: SRG) is acquiring Sydney-based asset management services group Diona for $111 million, bolstering its presence on the east coast and adding $1billion of work in hand to its portfolio.
The acquisition of Diona, which operates in the fields of water security and energy transition with utilities and government departments, is described as a transformational deal for the Perth-based SRG Global.
It also marks the second change of ownership in the space of a year for Diona which became part of consulting and engineering services provider Calibre Group in 2015 in a deal then worth $90 million.
The divestment of Diona to SRG Global follows a $275 million takeover of Calibre Group last year by Canada-based professional services business WSP – a global giant that has been acquisitive in the Australian market in recent years including the buyout of structural and civil engineering company Enstruct in 2022.
Diona employs more than 750 people at operations in Queensland, NSW, Victoria and South Australia that delivered revenue of $216 million in FY24.
The $111 million acquisition has been struck on a multiple of six times FY24 earnings before interest and tax, with SRG estimating the deal will be 10 per cent earnings-per-share accretive to FY24 earnings before any synergies or cross-selling opportunities are taken into account.
SRG says Diona’s end-to-end services in water security and energy transition, along with its established partnerships with utility and government agency clients, will complement its own capabilities in water, defence, resources, transport and energy transition.
“Diona adds highly complementary services to SRG Global’s existing business and self-perform competitive advantage and capability,” says SRG.
“It is also consistent with SRG Global’s stated strategy of delivering step change growth in recurring earnings underpinned by long-term collaborative program and asset management agreements.”
The acquisition of Diona has been announced with the release of SRG Global’s annual earnings results for FY24, which benefitted from “strong business fundamentals, excellent cash generation and solid operational delivery for our blue-chip client base”.
SRG posted a 32 per cent increase in revenue to $1.07 billion during the year FY24, leading to a 23 per cent increase in underlying EBITDA to $98.5 million.
SRG currently has a record $3 billion of work in hand, with Diona adding another $1 billion to this total, while the opportunity pipeline is estimated to be $8.5 billion.
“Diona is complementary to SRG Global’s service offering in highly attractive growth markets and geographic locations; and will further enhance our strong track record of cross-selling our end-to-end services,” says SRG Global CEO David Macgeorge.
“Diona comes with a high-quality management team and workforce with a proven track record of delivering for clients through long-term, collaborative program and asset management agreements.”
SRG Global plans to fund the acquisition via an equity raising of up to $66 million comprising a $60 million fully underwritten institutional placement and a non-underwritten share purchase plan of up to $6 million.
The remainder will comprise $50 million drawn from a new secured term loan with National Australia Bank (ASX: NAB) and Commonwealth Bank (ASX: CBA).
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.
)
)
)
)
)
