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

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news