QUEENSLAND’S booming coal sector heads Perth resources engineering group Calibre Global’s hit list following a landmark $100 million-plus capital injection from one of the world’s leading private equity investment groups.
QUEENSLAND’S booming coal sector heads Perth resources engineering group Calibre Global’s hit list following a landmark $100 million-plus capital injection from one of the world’s leading private equity investment groups.
The deal, with First Reserve Corporation, will also give Calibre added financial and technical clout as it seeks to achieve annual turnover of $1 billion within five years.
Greenwich-based First Reserve, the world’s biggest specialist resources private equity investment group, last week concluded nine months of negotiations to acquire a controlling 75 per cent stake in the unlisted Calibre.
First Reserve is understood to have paid more than $100 million for the stake, based on Calibre’s turnover of more than $133 million last financial year. The stake was bought via a partial sell-down by founders Ray Munro and Dave Walker.
In an associated transaction, specialist Queensland investment firm Connect Resource Services acquired a 2 per cent interest.
The move comes almost a year after former Consolidated Minerals chief Rod Baxter took over as managing director of Calibre with a brief to chart its next phase of growth.
Calibre is one of Australia’s leading and fastest growing engineering service providers to the resources sector, with work completed or under way totalling about $18 billion, including most heavy rail development in the Pilbara since 2005.
Already a dominant force in Western Australia’s iron ore sector, Calibre has also made its first moves into the Queensland coal industry where it is working on rail infrastructure for Gina Rinehart’s $5 billion Alpha Coal venture.
But First Reserve and CRS both already have a major involvement in the Queensland coal sector. First Reserve is an investor in the Whitehaven and Belvedere coal projects, and is a long-term backer of private US coal group AMCI, which also has a big presence in the region.
Similarly, CRS’s Queensland ties are impeccable, with its founders having previously been senior executives of AMCI Australia, MIM Holdings and Thiess.
Speaking to WA Business News, Mr Baxter said the added technical and financial clout of Calibre’s new backers would enable it to build on its success in WA and replicate that performance on the east coast.
“We have our core competencies and we are going to continue to do the things we are damn good at ... that’s iron ore, it’s coal, it’s the multi-billion dollar projects,” he said.
“Our strategy is to continue to service the iron ore industry and look for opportunities to build our presence in the coal sector on the eastern seaboard.
“Between First Reserve and CRS, these guys have a long history in the coal and energy sector ... so of course we’d be looking to leverage off that.”
Mr Baxter said the Queensland sector was relatively fragmented, especially in rail related services, with no party offering the end-to-end capability that Calibre provided in WA.
“So I think there is a great opportunity to come in and offer more than a fragmented service,” he said.
Mr Baxter said with First Reserve’s backing, Calibre also planned an aggressive acquisition program to complement its organic growth plans.
“We’ll be looking to be quite aggressive; our window is open, and it’s time now to start looking,” he said.
“Our aspiration is to build a billion dollar business.”
Though Calibre was not planning a big overseas push, Mr Baxter said it would also now have greater capacity to work on projects overseas being developed by existing clients, such as Rio Tinto’s Simandou iron ore project in Guinea for which Calibre was already undertaking rail work.
