Specialist Mining and Quarrying Plant Manufacture and Install Firm – Strategic Bolt-on for Existing Player or Market Entry For Global participant. Expressions of Interest Invited

Specialist mining and quarrying plant manufacture and installation business

$6,000,000

Business Opportunity:

This business presents a unique opportunity to expand specialist services or enter into the mining and quarrying plant manufacturing and services sector in Australia.

Established in 1980, this business provides turnkey solutions to mining and quarrying markets, from design, manufacture, installation and equipment enhancement, to problem-solving advice. It’s a true specialist operation, revered by clients and often partnered by large multi-national firms providing adjacent services to the same clients.

Existing industry players in mining and quarrying plant manufacture will likely see this firm as a potential strategic bolt-on or merger opportunity, given its breadth of offering, reputation, and design and delivery expertise. Global players offering end-to-end solutions to mines and quarries in the Australian and Asian markets may find our client a unique acquisition opportunity to gain exposure to an impressive list of clients in development and production cycles.

Either way, these types of opportunities don’t regularly present and therefore your interest is recommended.

 

Clients and Markets

The business primarily services hard rock, sand and gravel quarrying markets throughout Australia.

In addition to its core market, the business also services concrete plants and the concrete recycling industry through manufacturing and installation of crushers, screens and conveyors.

With periodic volatility in mining investment, one of the unique aspects of this business is its exposure to a mix of sectors – mining, construction and infrastructure. This diversification is highlighted currently with the firm having a very strong pipeline of potential projects, mirroring the growth that is forecasted in the business’s key markets of hard rock, sand and gravel, due to significant investment in construction and infrastructure in the Australian market.

One of the unique elements of this potential acquisition is for a suitor to gain access to a list of blue chip clients in construction, mining and infrastructure, from large private and corporate players in the quarrying and aggregates industry across Australia, through to a number of multi-national corporations with annual revenues over $2 billion and substantial operations involving hundreds of individual sites (quarries and concrete plants). Demonstrating the competitive advantages of this firm's offer and business model, its current project pipeline stems primarily from existing clients (~96%), indicating strong purchasing loyalty and repeat business.

People:

The business benefits from a highly experienced management team across business development, design, fabrication, assembly and installation. Staff complement one another through individual specialisation in areas such as design, logistics and project management, and operate collaboratively.

Install and delivery is a hallmark and point of difference of this firm with well-coordinated project planning involving key management staff. The business currently has 38 permanent staff and also effectively utilises well-developed sub-contractor relationships to mobilise in a flexible way, depending on project requirements.

While genuinely seeking to retire after many successful years in the business, to facilitate a transition to the new owner, if required, the business owner has agreed to provide extensive transitionary advice and assistance, consistent with his desire to see the firm successfully move to its next stage of development and success.

 

Financial Performance:

In conjunction with the extensive specialisation and expansion opportunities for prospective buyers, the business benefits from strong financial performance. Through the business’ competitive positioning and project delivery strengths, financial performance over the last 3 years has been impressive:

  • FY2018 revenue grew to ~$20m, a ~300% increase from FY2016
  • YTD revenue for FY2019 is running ahead of FY2018 performance
  • Work In Progress for the remainder of FY2019 and FY2020 represents ~90% of FY2018 performance
  • The business also has an extensive pipeline of tenders awaiting award
  • The firm has shown operational leverage over the last 3 years with expenses tracking positively as a percentage of revenue
  • Project and bottom-line earning margins show positive and improving performance, with EBT in FY2018 representing ~12% of revenue.

Overall financial results over the last 3 years show a business with the ability to repeatedly generate strong cash flows from a diversity of jobs and projects across the different market segments where it is exposed. Importantly the Vendor also advises that there are minimal capital expenditures required to continue to perform at and moderately above its current run-rate.

Point of Difference:

Mine and quarry operators are often heavily reliant on plant equipment suppliers due to their dependency on key machinery for operational efficiency and processing throughout.

Operating selectively in the hard rock, sand and gravel quarrying markets, this business is able to utilise its unique expertise and specialisation in the field to generate significant market value for its clients through offering complete customised solutions that satisfy individual project requirements and demands.

Clients rely on this specialisation due to limited competition in the market and the required knowledge and expertise needed to design solutions for effective operational efficiency to be achieved. Moreover, the business’ stand-out reputation supports its sought-after status due to client needs for swift and efficient solutions to operations requirements.

Business Location:

The business operates in close proximity to a major Australian capital city and benefits from extensive expansion possibilities due to its close proximity to key mining markets.

The firm's premises are purpose built for fabrication, assembly, painting, inventory storage and related functions. They provide for effective operations and also room for expansion.  Interested parties will be offered market competitive lease arrangements with extended terms to suit the nature of the business requirements. The business is also located within close proximity to its main suppliers, which provides logistics benefits in the fabrication and product assembly process.

Expressions of interest:

We are seeking Expressions of Interest from interested parties for the business as a going concern, including goodwill, related assets and operational plant and equipment. You are invited to lodge your interested by 31 January 2020. For more information, including a detailed Information Memorandum relating to the business, contact JPAbusiness.

The asking price for the going concern business and associated assets is $6,000,000 plus GST (if applicable) plus Stock at Value (S.A.V).

 

JPAbusiness Pty Ltd is operating under Corporation Licence No. 1710192 and 3485836.

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Quick Facts

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  • A well-established mining plant manufacturing and services business with almost 40 years experience
  • Specialises in the hard rock, sand and gravel quarrying industry and occupies a unique competitive position as a supplier of turn-key solutions in the Australian market
  • Completes projects for large players in the mining and quarrying markets - highly sought after by clients due to specialisation solutions and expertise in project delivery
  • Significant revenue and profit growth achieved over the 3 years to FY18
  • Possesses strong growth prospects with a healthy WIP and pipeline of prospects over the next two years

Important Information for Prospective Purchasers:

All information in this document is of a general nature only and not exhaustive. Interested parties should conduct their own due diligence and feasibility assessments. The Vendor of Specialist mining and quarrying plant manufacture and installation business, and advisers, JPAbusiness, are not liable for any loss or damages associated with reliance on this information or the Expressions of Interest process.

JPAbusiness Pty Ltd operating under Principal Business Agents License No. 1710192

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