Resource Development Group (RDG) announces that it has entered into a conditional Share Sale Agreement (SSA) to acquire Perth based Central Systems Pty Ltd (Centrals).
Centrals is a multi-disciplined, self-performing construction contractor and provider of remedial and maintenance services to the mining, energy and infrastructure sectors in Australia. Contracting services include civil, SMP (structural, mechanical & piping), E&I (electrical & instrumentation) and maintenance, remedial and protective coatings services. Centrals’ primary markets are the mining, oil & gas, defence and utilities sectors in Australia.
Centrals has a blue chip client base including Samsung, Fortescue Metals Group, BHP Billiton, Rio Tinto, Xstrata, Newcrest, CBH and BP. Major contracts currently being delivered by Centrals include a circa $100 million contract with Samsung for the Roy Hill Bridges Project, underground concrete contracts for Newcrest’s Cadia mine site, defence related protective coatings contracts for both NSM Australia and BAE in addition to multiple brownfields projects under a multi-year panel contract with BHP Billiton Iron Ore.
Under the terms of the SSA, RDG will issue Centrals' 5 shareholders a total of 497,175,172 RDG shares for 100% of the issued capital of Centrals. On Completion of the transaction, RDG will have a total of 631,404,067 shares and 6,000,000 options on issue. Centrals’ shareholders will (after the issuing of the shares) own in aggregate 78% of the fully diluted issued capital of RDG, with 4 shareholders each holding 16.58% and the other shareholder holding 11.7%.
The transaction under the SSA is subject to various conditions precedent, including all approvals required at law or under the ASX Listing Rules, consents from Centrals' financiers, release of encumbrances other than those permitted with Centrals' existing financiers, consents from counterparties to Centrals' key contracts, senior executives entering into employment contracts, and RDG shareholder approval of the transaction for the purposes of the ASX Listing Rules including Listing Rule 11.1.2.
RDG also proposes to invite Centrals Directors, Mr Richard Eden and Mr Andrew Ellison to join the RDG board. Mr Eden has an extensive track record in managing business growth with a strong focus on solid contract and financial management. Mr Eden has over 24 years of experience in maintenance and construction contracting throughout Australia.
A very experienced contractor with a successful track record in delivering business growth, Mr Ellison is currently the Director of Centrals responsible for strategic business development, development of new capabilities and services, identification of new territories and markets and key client relationship management.
RDG’s Managing Director Jeff Brill said the company is happy to announce the acquisition of such a capable construction company that is performing strongly in difficult market conditions. Observing that RDG and Centrals share many common clients, he believes the combined entity will be able to provide a credible design and construct offering to the market that will be of great interest to both their existing and new clients alike. With the addition of Centrals, the RDG Group will be able to offer whole of project lifecycle services spanning environmental, studies, engineering design, construction, maintenance and remedial services.