CARDNO ACQUIRES ENGINEERING FIRM FOR $11.7M
14 June 2011,
BRISBANE infrastructure services group Cardno Limited (ASX: CDD) has acquired a materials testing and geotechnical engineering firm based in Central Queensland for $11.7 million.
The acquisition of Roadtest will give Cardno access to a 60-person construction services operation with offices in Rockhampton, Emerald, Gladstone and the Whitsundays.
Cardno managing director Andrew Buckley (pictured), says the deal is expected to contribute around $8 million in revenue and $3.5 million in EBIT in FY12.
“Roadtest is a highly strategic partner to help continue the growth of our construction materials testing and geotechnical engineering capabilities across Australia and internationally,” says Buckley.
“Acquiring Roadtest increases our exposure to the work flowing from the extensive gas and coal developments under way or proposed in Central Queensland”, he added. Roadtest is undertaking work on the Gladstone LNG plant on Curtis Island and is also working on the expansion of the Curragh North Coal mine.”
Roadtest has developed a strong client base since commencing operations in 1985 including major civil contractors, councils, state road authorities and resource companies.
Roadtest managing director and founder Bill Ouston, says the acquisition will enable them to take advantage of the major opportunities which are emerging as a result of the significant investment in resource development projects in Queensland.
The acquisition will be funded by cash and scrip with around 75 per cent cash and 25 per cent shares. Around 519,000 shares will be issued at a price of $5.66. The cash component will be funded from available cash reserves.
Buckley says Cardno’s balance sheet remains strong following the acquisition and the company continues to focus on its strategy to grow organically and by further acquisitions. The company upgraded its forecast profits for FY 11 to a record $59 million – from $57 million.
CDD shares opened slightly down on the ASX today at $5.60.