- Johns Lyng Group (JLG) has acquired a 60 per cent controlling ownership stake in national restoration services company Steamatic Australia
- The transaction is a step forwards in the group's worldwide expansion plan, which began with the purchase of the Steamatic Worldwide Master Franchise
- At completion, Johns Lyng paid about $10.8 million in cash (from existing reserves), $4.8 million in JLG Ltd shares and a potential future earn-out
- Oliver Threlfall, the founder and CEO of Steamatic Australia, will keep the remaining 40 per cent of the company's stock
- Shares in John Lyng Group are up 3.71 per cent on the back of the announcement, trading at $5.59 at 12:38 am AEST
Johns Lyng Group (JLG) has purchased a 60 per cent controlling ownership stake in Steamatic Australia, a national restoration services firm.
Following the purchase of the Steamatic Worldwide Master Franchise in FY 2019, the agreement marks a milestone the group's global expansion plan.
At completion, Johns Lyng paid about $10.8 million in cash (from existing reserves), $4.8 million in JLG Ltd shares and a potential future earn-out depending on the financial performance of FY 2022 and FY 2023.
Steamatic Australia, which was founded in 1986 under the Global Master Franchise, employs 190 people and runs 39 sites, including 34 rural franchisees and five company-owned urban locations.
Oliver Threlfall, the founder and CEO of Steamatic Australia, will keep the remaining 40 per cent of the company's stock and, along with his long-serving senior management team, will be in charge of day-to-day operations.
Johns Lyng said the additional scale afforded by Steamatic's company-owned sites and franchisee network was projected to significantly boost its capacity to serve incremental business as usual activity and strengthen its ability to respond to catastrophic occurrences across the country.
Post completion, Johns Lyng will absorb roughly $3.8 million in existing (net) third-party interest-bearing debt, with the majority of it being refinanced with ANZ.
John Lyng said the purchase was expected to boost profitability immediately, with Restorx (its current restoration services firm) to continue to operate independently of Steamatic's Australian activities.
The company said clients would continue to do business with Steamatic as usual, with no changes to price, contractual arrangements or service quality.
Johns Lyng chief executive Scott Didier said the purchase showed the group's commitment to expanding the Steamatic footprint in the worldwide restoration services industry.
"When we secured the Steamatic Global Master Franchise in 2019, we gained access to Steamatic’s existing network of 11 International Master Franchise Agreements and 39 US based franchisees," Mr Didier said.
"This created a strong platform for strategic international expansion of our restoration services offering, and we’re pleased to progress this strategy through the acquisition of Steamatic Australia.
"The Group remains firmly focused on our international growth strategy with further franchise and other acquisitions currently under assessment."
"Locally, from an operational perspective, Steamatic Australia’s management and service delivery will remain unchanged, with Oliver and his long-standing senior management team continuing to manage day-to-day operations.”
Shares in John Lyng Group are up 3.71 per cent on the back of the announcement, trading at $5.59 at 11:31 am AEST.