Monday 20th October 2014
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Downer EDI, the infrastructure, mining and rail building firm, has bought trans-Tasman utilities business Tenix Holdings Australia for A$300 million, which it expects will boost earnings from the first year of ownership.
Sydney-based Downer has signed an agreement to buy the privately-held Tenix on a cash and debt-free basis, which it will fund through an existing bank facility, it said in a statement. The deal is expected to be completed on Oct. 31, and Downer said it will increase earnings from the first year. Tenix generated revenue of A$791.1 million in 2014 and earnings before interest and tax of A$29.4 million, and forecasts sales to be lower due to the completion of resources projects with flat Ebit.
"We have said consistently that we are interested in opportunities that are strategic, grow our capability and the right price," Downer chief executive Grant Fenn said. "There is little overlap between the two companies and Tenix will be the foundation for a new core utilities business for Downer."
Tenix designs, builds and operates network assets for utility companies across New Zealand, Australia and the Pacific, which makes up about 85 percent of its revenue. The remainder comes from its resources and energy unit, which designs, builds, installs and maintains infrastructure for mining, mineral processing, oil, gas and petrochemical and other manufacturing companies.
The ASX-listed shares last traded at A$4.05 on Friday.
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