NRW Holdings shares rocket 44pc on contractor acquisition
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NRW Holdings shares shot up 44 per cent on Tuesday after the mining services group announced an $85 million deal to buy civil and mining contractor Golding Group.
Golding is expected to open up the East Coast’s mining and infrastructure projects to NRW (ASX:NWH). The contractor’s $275 million of work scheduled for fiscal 2018 wouldn’t have been a turn off either.
NRW plans to pay for the deal via $12 million in cash already on its books, a $48 million loan, and a $25 million equity placement at 64c to 68c a share.
The two companies are similar in size — both saw revenue of about $370 million in 2017 and EBITDA of $53 million for Golding and $59 million for NRW.
Stanmore Coal (ASX:SMR) also updated the market on the purchase, given that Golding is leading work on its Isaac Plains project.
“Stanmore Coal has been advised by Golding its primary mining services contractor that it is being sold to NRW,” said company secretary Ian Poole.
“Stanmore has been assured by NRW and Golding management that Golding will continue to operate under its own brand and it will be business as usual for Isaac Plains.”
NRW shares hit $1.04 before settling at 95c — up 44 per cent on its previous close.