Spotless announced to the ASX (2 February) that it had signed a conditional acquisition agreement for the purchase of what is said to be Australia’s leading air-conditioning and mechanical services provider AE Smith.
Spotless chief executive officer Bruce Dixon said: “AE Smith is our fourth strategic acquisition over the last 6 months. The AE Smith acquisition will allow us to enhance our integrated service offering to customers, increase our in-house delivery (instead of subcontracting) and improve our margins.”
Established in 1898, AE Smith has annual service and maintenance revenues of more than $100m and some 665 employees across 10 locations throughout Australia, “AE Smith’s scale will make a significant contribution to Spotless going forward,” Dixon stated.
He added that, “I am excited by the opportunity to further strengthen our capabilities by providing air-conditioning and mechanical services to new and existing clients directly, reinforcing our position as Australia’s leading and integrated facility services provider. AE Smith provides Spotless with a platform for growth into technical services across a range of sectors including health, government, industrial and commercial.”
Spotless chairman Margaret Jackson said: “This outstanding acquisition builds upon our strategy of acquiring high quality, market leading businesses. As Australia’s premier airconditioning and mechanical services provider, AE Smith will deepen Spotless’ service offering, bringing significant scale and growth opportunities. The acquisition will be funded from our existing facilities, whilst retaining dividends at 65 to 75% of adjusted NPAT from FY15.
“As I have previously stated, the board is committed to striking the right balance between disciplined investments and providing returns to shareholders via dividends. We will continue to consider strategic acquisitions of high quality businesses that supplement our strong underlying organic growth and generate the best return for our shareholders,” she added.
Current CEO David Willett will continue to lead AE Smith in serving its client base across Australia.