Cardno Acquires PPI Group for $145M
Australia's infrastructure & environmental services consultancy Cardno Limited reported its largest acquisition to date with the purchase of the PPI Group of companies (PPI) headquartered in Houston, Texas for $145 million.
PPI provides specialist engineering services to the oil and gas sector in the United States, West Africa and Asia Pacific and employs 760 staff. PPI generated annual revenue of $133 million and EBITDA of $21.5 million in the year ended Dec. 31, 2013.
The acquisition including the impact of the AUD 50 million equity raising is expected to be immediately earnings accretive contributing approximately AUD 0.02 per share in FY2014 and an expected full year contribution of around 5.0 cents a share.
To help fund the acquisition, Cardno raised AUD 50 million in equity via a Placement. The Placement, which was oversubscribed, was underwritten by Morgans Corporate Limited. These funds assisted in financing the acquisition and will provide balance sheet capacity for future potential acquisitions.
Cardno CEO, Michael Renshaw said the acquisition of PPI is in line with the firm’s strategy of expansion in attractive growth markets such as energy. “This acquisition will strengthen Cardno’s ability to service the expanding oil and gas sector in the United States and in key emerging markets.” Renshaw said.
He said PPI’s engineering services to the midstream and upstream oil and gas sector will complement Cardno’s existing environmental and permitting capabilities in this market. Renshaw said PPI provides Cardno with new capabilities and proprietary systems in asset and quality management which has application in other asset intensive industries.
“While concentrated on the oil and gas market, PPI is diversified in terms of services offered and in geographic markets served. In addition to the primary markets of the United States and Nigeria, PPI is currently delivering projects in Australia, Singapore, South Korea, Japan, Malaysia and Angola,” Renshaw said.
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