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Industrial services group Tasmea Limited (ASX: TEA) has acquired integrated energy services provider JPS Group for total consideration of up to $75 million, extending an acquisition spree that has now topped $329 million in less than a month.
The deal comprises a $50 million upfront payment - split between $24.5 million in cash and $25.6 million in Tasmea scrip issued at $8.50 per share - with a further $25 million in cash earn-out payments spanning FY27 to FY30, contingent on JPS achieving maintainable EBIT of at least $12 million per annum.
The acquisition comes just weeks after Tasmea struck a $254 million deal for Melbourne-based electrical contractor Maxim Group as the company builds scale across energy, infrastructure and data centre services.
JPS provides integrated services to the Australian energy sector, including electrical, instrumentation, mechanical, civil and fabrication work.
The business has delivered 100 per cent organic revenue compound annual growth from FY23 to FY26, with revenue forecast to double again by FY29.
Forecast underlying EBIT for FY26 is about $10 million, putting the upfront enterprise value to EBIT multiple at roughly five times.
All five of JPS Group's founder-general managers have been retained under the deal, consistent with Tasmea's owner-led operating model.
“The acquisition of JPS Group is a defining step in Tasmea’s programmatic growth strategy and diversifies the group’s earnings into the structurally growing LNG, gas and critical energy infrastructure sectors,” says Tasmea managing director Stephen Young.
“JPS is a specialist, high-quality, high growth, owner-led business with a strong national and early-stage global footprint with strong competitive advantages, evidenced by its embedded relationships across a Tier-1 energy client base and high recurring revenues under more than 10 long-term MSAs."
Young says the deal will be immediately earnings-per-share (EPS) accretive, with 5 per cent forecast pro forma EPS accretion in FY26 incremental to the Maxim Group acquisition.
“Critically, the acquisition preserves the owner-led model that has built both Tasmea and JPS," he says.
"All five of JPS’s founder-general managers are staying with the business, taking equity in Tasmea, and are incentivised through a four-year earn-out aligned to the delivery of $12 million of maintainable EBIT per annum.
"We are delighted to welcome the JPS team to Tasmea and look forward to supporting their continued growth, through our corporate services platform and broader specialist trades capability.”
The JPS founders say the decision to partner with Tasmea was "straightforward given the strong alignment in culture".
“Joining Tasmea allows us to retain our brand and leadership team and continue running the business as we have built it, supported by Tasmea’s balance sheet, workforce capability and corporate services as we scale our offering,” the founders say in a joint statement.
On a pro forma basis including both JPS and Maxim, Tasmea's FY26 group underlying EBIT rises to $185 million, up from $175 million on a pro forma basis with Maxim alone.
Settlement of the JPS acquisition is conditional on approval from the Australian Competition and Consumer Commission under Australia's new mandatory merger control regime.
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