Daily NewsView All News
Australia’s largest staffing company, Skilled Group (SKE:ASX), has expanded its exposure to the lucrative oil and gas sector with the acquisition of marine services provider Broadsword Marine Contractors, the company announced to shareholders this morning.
The news sent up Skilled Group’s share price by nearly +10% to AUD 2.39, giving the firm a current market value of AUD 509.10 million (USD 486.98 million).
Broadsword supplies equipment and boats to offshore oil and gas companies. Skilled Group will pay an initial AUD 48.8 million (USD 46.67 million) and a further AUD 26.7 million (USD 25.53 million) over the next three years for a total purchase price of AUD 75.5 million (USD 72.21 million). The transaction is expected to be completed next month and the acquisition is forecast to deliver up to AUD 17 million (USD 16.26 million) EBITDA for the 2014 financial year.
Skilled Group Chief Executive Officer, Mick McMahon, said: “This is a carefully targeted and financially compelling acquisition that extends our capability, geographical reach and exposure to oil and gas, while enabling an extension of service to our clients.
“We are very pleased to have secured the ongoing services of Broadsword founder, Grant Farris, who will continue to manage the business. Grant has built a successful business and is well respected by his clients.”
The recruiter said the acquisition complements existing manning and marine logistics services provided by the Group's Offshore Marine Services business. But the deal will not have a major impact on the company’s outlook for this year with the firm saying that trading conditions remain challenging in some business segments while others post growth.
The firm is experiencing continued weaknesses in the mining sector. But the engineering & marine services business is showing growth, helped by oil & gas and maintenance services.
Skilled Group dominates the Australian staffing market with almost twice the market share of its closest rivals, according to research by Staffing Industry Analysts.