Perth-based international consulting, engineering and contacting company, VDM Group, has its sights on further acquisition-based expansion and expected listing on the Australian Stock Exchange in the middle of next month.
Perth-based international consulting, engineering and contacting company, VDM Group, has its sights on further acquisition-based expansion via an $8.2 million capital raising and expected listing on the Australian Stock Exchange in the middle of next month.
At the completion of the $1 a share offer, VDM will comprise three consulting engineering practices: Van Der Meer Consulting in Western Australia, Victoria, New South Wales, Queensland, Hanoi and Bahrain; urban developer Burchill Partners in Queensland; and its environmental engineering subsidiary Belleng, also in Queensland.
The company will also own two WA construction companies in Keytown Constructions, a commercial, industrial and residential builder, and Civmec, a civil and mechanical engineering services contractor to the mining industry.
Group clients include some of the biggest names in Australia’s construction and resources sector, including BHP Billiton, Rio Tinto, Mirvac and Leightons.
On the successful completion of a current due diligence study, VDM will acquire long-established Perth com-pany Ewing Consulting Engineers for $900,000 cash and 300,000 shares.
VDM chief executive officer and deputy chairman John Farrell described Ewing as a “bolt-on profit centre” for the group that would double the service capacity of its WA operations.
He told WA Business News there were a number of other related acquisitions in the wings, which he declined to reveal. “However, I would be disappointed if we did not make another acquisition by the end of the current financial year,” Mr Farrell said.
The capital raising, fully underwritten by Patersons Corporate Finance, equates to 16 per cent of the company’s shares.
It will also enable the acquisition of the remaining 50 per cent of Civmec for 6.6 million shares, along with 75 per cent of Burchill/Belleng for $125,000 cash and 10.6 million shares.
VDM’s international project portfolio and turnkey operations currently include tourist resorts, marinas, hotels, shopping centres, sporting complexes, as well as oil, gas, resource and mining developments. It has more than 300 employees and subcontractors.
Group turnover for the current financial year is forecast to exceed $105 million, well up on 2005’s $85.2 million, with after-tax profits predicted at about $7 million, up slightly on the previous year’s $6.4 million.
VDM was established by Andrew van der Meer in 1978 as Applied Design Pty Ltd and thrived on innovative engineering solutions for projects mostly associated with the North West Shelf development.
In the mid-1980s, strong growth led the company to recruit five other engineering professionals, all of whom are still with VDM. In the 1990s it expanded further into structural, civil and marine engineering, and moved into the eastern states market.
After the issue, VDM will have 52.35 million shares on issue and two million convertible notes.
