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CONSTRUCTION firm Onterran (ASX:OTR) is set to reap more than $95 million after acquiring apartments and land at Couran Cove Resort.
The Brisbane-based company has identified 'substantial' development potential at the South Stradbroke Island site, with plans to develop 220 approved houses and sell 105 existing apartments.
The acquisition also includes large leasehold parcels of land, with the project forecast to generate more than $95 million in revenue over the next four years.
Onterran executive chairman Lachlan McIntosh says the acquisition will bolster the company's pipeline of work.
"The board of Onterran is excited about the acquisition of the Couran Cove Resort assets as we consider there is significant upside potential in the acquired assets, and the development land provides the platform for the company's next four to seven years' work," McIntosh says.
"The development potential of Couran Cove is vast and we expect it to be challenging but also very rewarding."
He says the strategy will help Onterran become less susceptible to pricing fluctuations.
The company has recorded rising prices in Queensland with its acquisition of Bloomer Constructions, while regional work in Western Australia has declined.
The acquisition is expected to drive earnings from 2017 to 2020 and provide a base for further investments.
Onterran will raise up to $21.5 million through the issue of redeemable convertible preference shares at 55 cents apiece to fund the acquisition. The offer follows an 8-for-1 share consolidation, with a maturity date of five years from issue.
The company will hold an extraordinary general meeting on August 15 for shareholders to approve the issue.
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