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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news