SCEE to buy electrical business for $54m

Southern Cross Electrical Engineering is set to expand its service offering with the $53.5 million acquisition of an electrical services group based in Victoria.

SCEE will acquire Trivantage Group, which has operated in Australia for more than 50 years. 

Its three specialist divisions are SJ Electric, SEME Solutions, and Trivantage Manufacturing.

The group generated statutory revenue of $116 million and net profit before tax of $8.2 million in the past financial year.

Trivantage is expected to deliver FY21 revenue of about $130 million.

SCEE said the acquisition would bring diversification benefits and cross-selling opportunities to the company, headquartered in Naval Base.

It expects to receive revenue of about $500 million post acquisition, with the deal scheduled to be completed in mid-December.

SCEE chief executive Graeme Dunn said there was a strong cultural fit between the two companies.

“The acquisition will give us many cross-selling opportunities and synergies across our respective client bases and, in particular, through Trivantage’s switchboard manufacturing capability,” he said.

Consideration for the acquisition consists of $35 million in cash, as well as $5.5 million worth of SCEE shares based on Trivantage meeting certain FY21 targets.

Further cash payments will be made subject to performance targets throughout FY22 and FY23.

Investec is acting as corporate adviser to SCEE and EY as financial adviser, while K&L Gates is acting as legal adviser.

SCEE says it will fund the purchase with its existing cash reserves and operating cash flows.

The group reported revenue of $415.1 million in FY20, up 8 per cent on the prior financial year.

Its net profit was 14 per cent lower, to $10.9 million.

SCEE emerged from a trading halt this morning, with its shares up 7.6 per cent at 2:04pm AEDT to trade at 50 cents.