Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Hellaby finally finds acquisition in Contract Resources

Hellaby finally finds acquisition in Contract Resources

By Paul McBeth

Dec. 27 (BusinessDesk) - Hellaby Holdings, the diversified investment group, has finally found something to buy after being on the prowl for the past two years in specialised engineering maintenance and industrial cleaning company Contract Resources.

The Auckland-based investment firm will spend $73 million on an 85 percent stake in Contract Resources, and saddle it with $30 million in debt, it said in a statement today. The other 15 percent will be held in equal tranches by chief executive Andrew Wells and senior managers Trevor Penny and Gray Gardner. The deal puts an enterprise value of $116 million on Contract Resources.

"With around 90 percent of revenues generated offshore, it offers the portfolio and geographic diversification we have been seeking," Hellaby managing director John Williamson said. "The company is heavily exposed to the oil and gas sectors which Hellaby has identified as strategically attractive."

Hellaby has been seeking a new acquisition since the latter half of 2010 after it strengthened its balance sheet faster than expected in the wake of the global financial crisis and has been keen on finding an investment with an international earnings stream.

Contract Resources is expected to generate sales of $150 million in the year ending March 31, 2014, with earnings before interest, tax, depreciation and amortisation of more than $20 million. The business operates internationally, with Australia its biggest market, and counts Caltex, Shell, Exxon Mobil and NZ Refining Co among its customers.

"While one-off acquisition costs are likely to offset the first three months earnings attributable to Hellaby, the acquisition will be earnings per share accretive for the Hellaby financial year to 30 June, 2014," Williamson said.

Hellaby boosted annual profit 26 percent to $19.3 million this financial year on sales of $497.7 million from its existing portfolio which is made up of shoe retailing, Elldex packaging, wholesale equipment distribution and autoparts units.

The company will fund its equity component of the acquisition through existing banking facilities, and the deal is scheduled to settle on March 31 next year.

Shares in Hellaby rose 1.3 percent to $3.05 in trading on Monday, and have climbed 27 percent this year. The stock is rated an average 'hold' according to three analyst recommendations compiled by Reuters, with a median target price of $3.26.

Wellington-based investment firm Rangatira was one of the sellers with a 50 percent stake in Contract Resources and will realise just over $50 million from the deal.

Last month, Rangatira said the timing of Contract Resources' meant earnings jumped around and led to a fall in its first-half earnings.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news