Shaw and Partners is pleased to be appointed as Joint Lead Manager to a proposed capital raising by SRG Global Limited (ASX.SRG).

SRG is undertaking a fully underwritten institutional placement of approximately 64.4 million new fully paid ordinary shares (“New Shares”) to raise A$46.4 million (before costs) at an issue price of A$0.72 per New Share (“Offer Price”) (“Placement”) and a non-underwritten Share Purchase Plan (“SPP”) for up to A$5 million (together the “Offer”).

The Offer Price represents an attractive 4.6% discount to last close of A$0.755 per share on Wednesday, 15 February 2023 and 6.0% discount to 5-day VWAP of A$0.766 per share up to  and including Wednesday, 15 February 2023.

SRG is a diversified industrial services company that was born out of Australia’s greatest engineering challenge, the Snowy Mountains Hydro-electric Scheme, in 1961. SRG supports clients across a broad range of industries including mining, oil and gas, renewables, steel, dairy, transport, water, utilities, defence, chemicals, processing and manufacturing.

SRG announced that it will acquire 100% of ALS Industrial Pty Ltd (ALS Asset Care) (“Asset Care”) for $80m on a cash-free, debt-free and normal level of working capital basis. The acquisition will be funded via proceeds from the Placement and SPP, A$30m drawn from a new secured term loan and existing cash on hand as at 31 December 2022.

Implied acquisition multiple of 5.2x FY23E EBITDA before cost and revenue synergies with highlights of the Asset Care acquisition being:

• Adds complementary technical expertise in asset integrity & reliability engineering and inspection & testing services
• Will accelerate SRG’s shift towards annuity revenue and earnings to 58% of total revenue (from 51% pre-transaction)
• Is EPS(A), EBITDA and EBIT(A) accretive pre cost and revenue synergies on a pro forma FY23E basis

The offer is available to Australian Sophisticated and Professional Investors only.

For more information about the offer please contact your Shaw and Partners adviser.