- Coventry Group (CYG) is set to acquire Tasmanian-based hydraulic equipment company Fluid Power Services (FPS)
- The company will buy FPS for $2.1 million in cash, which will be funded through a recent financing facility with banking giant NAB (NAB)
- Coventry believes the acquisition will be highly complementary to its business as FPS boasted $4.9 million in the 2020 financial year
- Additionally, FPS will allow Coventry to expand its presence into Tasmania
- Coventry's shares are trading flat at $1.17
Coventry Group (CYG) is set to acquire Tasmanian-based hydraulic equipment company Fluid Power Services (FPS).
The acquisition deal will see Coventry purchase all of FPS' assets for $2.1 million which will be funded through a recent financing facility with ASX-listed banking giant NAB (NAB).
Founded in 1991, FPS provides hydraulic products and engineering solutions to clients in the infrastructure, transport and logistics, building and construction, and the industrial, mining and resources sectors.
As Coventry also operates in the industrial, mining, construction and infrastructure sectors, the FPS acquisition is highly complementary and will expand the company's presence in Tasmania.
Additionally, the buy is is expected to be earnings per share accretive as FPS generated $4.9 million in revenue in FY20 and an adjusted earnings before interest, tax, depreciation and amortisation of $1.2 million.
"FPS is a well-run business that has delivered sales and earnings growth over an extended period. The business is highly complementary to our Fluid Systems business, further diversifying into non-mining markets and providing geographical coverage in Tasmania," Coventry Managing Director and CEO Robert Bulluss said.
Significantly, the purchase aligns with Coventry's growth strategy and expansion plans.
The acquisition is subject to certain conditions which are expected to be completed by April 30.
Coventry's shares are trading flat at $1.17 at 12:04 pm AEST.