Management Resource Solution gobbles up SubZero Group

The AIM-traded firm said the conditional asset sale agreement has been made on exclusive terms through until 30 September, subject to certain key conditions being satisfied.

Among those conditions are a cash payment of AUD 1m on settlement, AUD 0.5m payable in cash 12 months after the date of completion, the issue of approximately 7.2 million new ordinary shares at a price of 12.75p per share, and the assumption of approximately AUD 2.85m of equipment finance liabilities and employee benefits.

The acquisition is consistent with the growth strategy set out at the time of the company's admission to AIM, MRS’s board said, which is to “strategically expand” the MRS group.

It said SubZero fits within MRS's existing core offerings of project management, labour hire, wet and dry hire, and maintenance.

The assets being acquired from SubZero are reported have pro-forma annual revenues to 30 June of approximately AUD 40m.

MRS said the acquisition will be financed using existing bank credit lines including a AUD 4.2m credit offer from Westpac Banking Corporation, subject to certain conditions.

“I am very pleased to announce this acquisition; executing on our growth strategy as set out at the time of MRS's admission to AIM,” said Management Resource Solution CEO Paul Morffew.

“The acquisition is highly value accretive and, upon integration, will enable synergies for the Company that complement our existing skill set and specialism in support services.”

Morffew said the MRS board believes this is a good deal for shareholders, using the company’s cash resources and equity efficiently in order to provide exposure to the improving macroeconomic climate in the Hunter Valley coal industry, and enabling MRS to provide a better service to its “top-tier” customer base.

“With this acquisition we will work towards being the leading Hunter Valley heavy industry maintenance provider,” Morffew added.