Buying BGC was the most significant acquisition in a series by NRW Holdings, which was intended to extend its position in the market.
Three deals over four years have provided NRW Holdings with significant impetus for growth in the local contracting market.
The numbers tell a compelling story.
Business News Data & Insights figures show the Belmont-based contractor employs more than 4,200 Western Australians, nearly five times the number it employed four years ago.
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NRW’s market capitalisation has increased almost 50-fold, from a low point of around $15 million at the bottom of the commodities cycle in 2016, to $700 million at the time of writing.
The business’s largest acquisition was that of BGC Contracting late last year, a deal that valued the target at $310 million.
That move brought about 2,300 workers onboard nationwide.
It followed the $10 million purchase of parts of RCR out of administration earlier that year, and the $75 million acquisition of Golding Group in 2017.
NRW chief executive Jules Pemberton said the BGC deal helped the company enlarge its presence as an infrastructure contractor.
“The BGC acquisition really gives us a significant jump into the [country’s top] level of projects,” Mr Pemberton said.
“The acquisition and integration of the team give us the platform to compete in that space.”
While both businesses had heavy exposure to the mining industry, he said BGC had introduced additional expertise for public works projects.
BGC had attained the federal government’s highest level of accreditation for road and bridge construction contracts, Mr Pemberton said, which was a further boost for NRW post-deal.
Mr Pemberton told Business News the acquisition would help NRW bid for upcoming infrastructure projects
Already, the tie-up was bearing fruit, with NRW making the final stage of tendering for the Bunbury Outer Ring Road project, work on the interchange of Leach Highway and Welshpool Road, and the Mitchell Freeway extension project.
Mr Pemberton said the teams had been integrated, with BGC office staff moving from Osborne Park into NRW’s two buildings on Great Eastern Highway, putting the estimating team and management staff in a single location.
Changing market
The consortium for the $850 million Bunbury Outer Ring Road project is badged as Southwest Connex.
It is led by Spanish conglomerate Acciona, supported by NRW Contracting, MACA Civil, AECOM, and Aurecon.
One competing consortium has been shortlisted, the Forrest Alliance, led by CPB Contractors.
Mr Pemberton said the Bunbury project would be NRW’s first time working with Acciona, although the Spanish company had previously teamed up with BGC.
While there had been a lot of noise about the promotion of local contractors, including through the Australian Owned Contractors lobby group, Mr Pemberton was not concerned by international involvement in WA.
“Competition is healthy, there’s nothing wrong with competition,” he said.
“Our partner in Bunbury is Acciona … you need a broad base of skills.
“But local contractors and local subcontractors are very important.”
NRW previously worked with Italian company Salini Impregilo on the Forrestfield Airport Rail Link, where it was a 20 per cent partner.
That $1.2 billion contract was let in 2016, and the most recent update said trains would begin operating by late 2021.
The agreement also includes maintenance work for 10 years, until 2030.
For that project, Mr Pemberton said Salini had brought experience in tunneling, including on Melbourne’s underground city loop in the 1970s.
“I’ve enjoyed the experience with Salini, it’s a project [of the kind] that’s never been delivered in Perth before” he said.
Pandemic
Reflecting on the work environment of recent months, Mr Pemberton said managing staff wellbeing had required a good flow of information.
“It’s been challenging,” he said.
“When you have 7,000 people across 100 projects … and a lot of them have different rules.
“And they were changing at one point on a daily basis.
“It has been extraordinarily challenging to keep information flows up to date … and keeping our people as safe as they possibly can be.”
Mr Pemberton said effective leadership had been displayed across the business on this front.
He also endorsed the state government’s moves to fast-track project approvals, which was intended as a post-pandemic stimulus.
The company reported revenue of $1.6 billion in the 10 months to April, which it said was higher than any previous full financial year.
