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NRW Holdings shares in trading halt after acquisition announcement

Kenneth Hall
M&A Letters

The NRW Holdings Ltd (ASX: NWH) share price will be one to watch when it returns to trade after the company’s $116.4 million acquisition announcement.

What did NRW Holdings announce?

The “transformational acquisition” will see NRW acquire 100% of BGC Contracting for an equity value of $116.4 million. The implied enterprise value of the contractor is $310 million.

BGC Contracting provides services to the resources, energy and infrastructure sectors across three businesses – Mining, Construction and DIAB Engineering.

The NRW Holdings share price will be one to watch when it returns to trading on Monday 2 December as shareholders react to the acquisition news.

The “strong strategic fit” is expected to help NRW scale up and expand its service offering to customers. NRW’s Mining Technologies segment looks set to benefit from the addition of DIAB engineering and its specialist solutions.

The acquisition will add BGC Contracting’s existing contract portfolio and $1.5 billion order book to NRW’s existing operations. This brings NRW’s combined order book to $4.0 billion with $2.2 billion scheduled for delivery in FY20.

The transaction will be paid for by NRW in $116.4 million in cash with $193.6 million of debt taken on by the company.

NRW is taking on a fully underwritten placement to raise $120 million and a separate share purchase plan capped at $10 million.

The NRW Holdings share price remains in a trading halt this morning as the company completes its equity raising.

How has the NRW share price performed in 2019?

The NRW Holdings share price has been surging higher in a solid 2019 for shareholders.

NRW shares closed at $2.83 per share yesterday and have climbed 76.88% since the start of the year.

The Aussie engineering group has pushed past the $1 billion market capitalisation mark and currently trades at 33.6x earnings.

The group has been a strong ASX growth stock for a number of years. The NRW Holdings share price is up an incredible 3,000% since the start of 2016.

The post NRW Holdings shares in trading halt after acquisition announcement appeared first on Motley Fool Australia.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019