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Ruralco to buy Irrigation Tasmania
Posted on Thursday, 16 February 2017 11:25
Ruralco Holdings has inked an agreement to acquire Australian irrigation system operator Irrigation Tasmania for roughly AUD 19.93 million (USD 15.27 million).
An additional earn-out will be payable if certain financial targets are achieved.
Travis Dillon, chief executive of Ruralco, stated: “We are pleased to have secured a portfolio of high quality businesses aligned with our Future Farming Strategy on attractive acquisition metrics.
“Ruralco is well positioned to grow the business, with the focus remaining on balancing the execution of strategy with improvements in operating leverage to ensure increased shareholder returns.”
Completion is expected on 1st March 2017.
In addition, Ruralco announced a rights issue worth AUD 35.11 million on the basis of one new share for every six units already held.
The company also unveiled a AUD 30.06 million stock placing to help finance the portfolio of acquisitions and enhance its balance sheet.
Ruralco agreed to purchase Australian irrigation systems design and project manager Doyzan and water supplier River Rain from Costa Group Holdings in a separate announcement.
The New South Wales-headquartered company claims to be a leading Australian agribusiness, with more than 2,000 employees.
Ruralco generated revenue of AUD 1.76 billion in the financial year ended 30th September 2016, a 10.0 per cent increase on AUD 1.60 billion in the previous 12 months.
Net profit for the period totalled AUD 12.65 million, a significant decline on AUD 27.98 million in FY 2015.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 20 deals targeting water supply and irrigation systems announced worldwide so far in 2017.
The largest of these was Singapore-based SIIC Environment Holdings’ SGD 220.50 million (USD 155.10 million) capital increase with Shanghai Industrial Holdings in January.
This was followed by Sichuan Guangan AAA Public’s CNY 213.00 million (USD 31.00 million) agreement to acquire China-headquartered Sichuan Guangan AAA Garden Water Affairs earlier this week.
Energoprojekt Holding, Jijin Water Services and China Water Industry Group, among others, have also been targeted so far this year.
© Zephus Ltd