Lincoln crowne engineering mining services m & a report 18 october 2013

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Lincoln Crowne & Company market update report on the Australian Engineering & Construction Sectors including coverage of deals announced during the week by Puma Energy and Air Change International

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Lincoln crowne engineering mining services m & a report 18 october 2013

  1. 1. WEEKLY Australian Engineering & Mining Services 18 October 2013 WWW.LCC.ASIA M&A Rumour and Activity The Australian market closed the week at its highest level in almost 5 years after US Senate leaders reached a last-minute deal to temporarily extend the debt ceiling and reopen government. The Australian dollar also jumped on the US debt news, hurting US dollar-exposed resource companies. UGL continues preparations for its upcoming demerger with DTZ (UGL’s property services company) being presented to analysts in Sydney. UGL still aims to complete a demerger in FY15. Two other small deals were announced last week. Small listed Air Change International limited (ASX : AHJ) announced the acquisition of Fan Coil Industries (www.fancoil.com.au). AHJ is a HVAC player that has been suspended for over 12 months due to a lack of shareholder spread. Fancoil, which designs and manufactures fan and coil equipment for the HVAC industry, is based in Smeaton Grange, Australia. Terms of the deal have not as yet been announced. In October 2012 Air Change acquired Summit industrial Chillers for about $1M upfront and a profit based earn out structure. Netherlands Oil Products Storage & Distribution company Puma Energy Beheer BV announced the acquisition of Caltex Australia’s Bitumen Importing Business, which is based in Sydney. The sale is subject to FIRB approval, and again terms have thus far not been disclosed. News Headlines and Key Sector Developments Ticker News/Event Ticker News/Event AJL Executed a new loan facility agreement with Kerogen Investments. The restructured facility will be drawn down by AJL and used to refinance all amounts outstanding under an existing facility agreement with Kerogen RCR Has been awarded $125M in new strategically important contracts across its Resources and Infrastructure businesses DSB Has announced a range of initiatives to reduce its debt position. These will result in a debt level of approximately $14M at 31 December 2013, representing a 44% reduction from the debt level at 30 June 2013, which was some $25M RCR Mr Lloyd Jones will join the RCR Board as an Independent Non Executive Director following RCR’s Annual General Meeting in November. Mr Jones has significant experience in mining, energy, construction and heavy industrial operations in Australia, Asia and North America. Mr Kevin Edwards has also advised the RCR Board of his intention to retire from the Board at the end of RCR’s 2013 Annual General Meeting IMD Recorded 1Q14 combined revenue of $53.3M, down 28% from the record achieved in the previous corresponding period (1Q13: $73.7M) and a 9% decrease by quarter (4Q13: $58.3M). EBITDA (including equity accounted VES International joint venture result, yet excluding the profit on sale of approximately half their holding in Sino Gas and Energy) down 84% to $2.7M from the previous corresponding period TSE Provided an update on contracted revenue with order-book $9.5B, down 13.6% from last year but up from December 2012. TSE’s pipeline is $25.2B, down 16.8%. This reflects tighter strategic focus on growth sectors and slow six months for contract awards across the economy outside of coal seam gas Source: Capital IQ, Thomson Reuters, LCC research IMPORTANT DISCLAIMER This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be, nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made. Page 1 /2
  2. 2. WEEKLY Australian Engineering & Mining Services 18 October 2013 Ticker Company Name AJL ASL AAX ANG BLY BKN BYL BOL BSA CDD CGH CLO COF DCG DSB DOW EAL EGN EHL EVZ FWD FGE GCS GNG HDX IMD LEI LCM LYL MLD MAH MYE MIN MCE MND NMS NWH OTC PRG RCR RQL SND SDM SSM SWL SXE STS SWK TPP TSE UGL VMG WDS WOR WTP AJ Lucas Group Limited Ausdrill Limited Ausenco Limited Austin Engineering Limited Boart Longyear Limited Bradken Limited Brierty Limited Boom Logistics Limited BSA Limited Cardno Limited Calibre Group Limited Clough Limited Coffey International Limited Decmil Group Limited DeltaSBD Limited Downer EDI Limited E&A Limited Engenco Limited Emeco Holdings Limited EVZ Limited Fleetwood Corporation Limited Forge Group Limited Global Construction Services Limited GR Engineering Services Limited Hughes Drilling Pty Limited Imdex Limited Leighton Holdings Limited Logicamms Limited Lycopodium Limited MACA Limited MacMahon Holdings Limited Mastermyne Limited Mineral Resources Limited Matrix Composites & Engineering Monadelphous Group Limited Neptune Marine Services Limited NRW Holdings Limited OTOC Limited Programmed Maintenance Services RCR Tomlinson Limited Resource Equipment Limited Saunders International Limited Sedgman Limited Service Stream Limited Seymour Whyte Limited Southern Cross Electrical Engineering Structural Systems Limited Swick Mining Services Limited Tempo Australia Limited Transfield Services Limited UGL Limited VDM Group Limited WDS Limited WorleyParsons Limited Watpac Limited WWW.LCC.ASIA Market Cap Open Price Close Price Week High Week Low (AUD Million) (AUD) (AUD) (AUD) (AUD) 358 443 212 293 196 1,009 43 85 32 952 145 1,142 58 432 21 2,156 84 47 160 11 218 423 89 98 67 166 5,841 131 176 442 176 83 2,137 68 1,648 83 392 19 324 481 49 71 167 57 106 177 28 78 7 671 1,281 10 120 5,533 168 1.32 1.39 1.65 3.54 0.43 5.82 0.40 0.18 0.13 6.30 0.46 1.46 0.23 2.29 0.44 4.67 0.68 0.16 0.22 0.06 3.50 4.98 0.50 0.68 0.34 0.80 17.49 1.88 4.61 2.56 0.14 1.02 11.40 0.69 17.32 0.05 1.35 0.10 2.84 3.58 0.19 0.91 0.74 0.17 1.36 1.10 0.45 0.36 0.06 1.26 7.70 0.01 0.79 21.83 0.82 1.34 1.42 1.72 4.00 0.43 5.96 0.39 0.18 0.14 6.59 0.46 1.47 0.23 2.56 0.46 4.96 0.74 0.15 0.28 0.06 3.60 4.91 0.52 0.65 0.32 0.79 17.32 1.88 4.53 2.56 0.14 1.10 11.49 0.72 17.85 0.05 1.41 0.10 2.74 3.53 0.20 0.92 0.75 0.20 1.36 1.10 0.45 0.36 0.04 1.31 7.85 0.01 0.83 22.42 0.91 1.34 1.45 1.73 4.13 0.45 6.04 0.42 0.18 0.14 6.75 0.48 1.48 0.23 2.58 0.50 4.99 0.75 0.16 0.28 0.06 3.64 5.03 0.52 0.68 0.34 0.80 17.80 1.92 4.73 2.70 0.15 1.10 11.49 0.73 17.90 0.05 1.42 0.10 2.92 3.61 0.20 0.92 0.78 0.21 1.40 1.10 0.48 0.36 0.06 1.34 8.08 0.01 0.86 22.48 0.94 1.26 1.34 1.60 3.51 0.41 5.62 0.39 0.17 0.13 6.25 0.45 1.46 0.20 2.27 0.44 4.56 0.66 0.15 0.22 0.06 3.37 4.80 0.47 0.62 0.31 0.72 16.78 1.85 4.35 2.50 0.13 1.00 10.99 0.69 16.91 0.05 1.33 0.09 2.74 3.43 0.19 0.91 0.72 0.17 1.36 1.03 0.40 0.34 0.04 1.22 7.67 0.01 0.77 21.72 0.82 Weekly Volume % Change ▲ ▲ ▲ ▲ ▲ ▲ ▼ — ▲ ▲ — ▲ — ▲ ▲ ▲ ▲ ▼ ▲ — ▲ ▼ ▲ ▼ ▼ ▼ ▼ ▲ ▼ — ▲ ▲ ▲ ▲ ▲ — ▲ — ▼ ▼ ▲ ▲ ▲ ▲ — ▼ ▲ ▲ ▼ ▲ ▲ — ▲ ▲ ▲ 1.5% 2.5% 4.2% 13.0% 1.2% 2.4% -1.3% 0.0% 7.7% 4.6% 0.0% 0.7% 0.0% 11.8% 4.5% 6.2% 9.6% -6.3% 25.0% 0.0% 2.9% -1.4% 4.0% -4.4% -4.5% -0.6% -1.0% 0.3% -1.7% 0.0% 3.7% 8.4% 0.8% 3.6% 3.1% 0.0% 4.1% 0.0% -3.5% -1.4% 2.6% 0.5% 1.4% 17.6% 0.0% -0.5% 1.1% 1.4% -21.8% 4.0% 1.9% 0.0% 5.7% 2.7% 11.0% EV/ EV/ EBITDA EBIT NM 3.2x 5.2x 6.9x 3.8x 8.1x 2.2x 3.7x 4.1x 8.2x 3.1x 7.0x 7.4x 5.6x 2.5x 3.9x 7.3x NM 3.3x 7.6x 6.4x 3.3x 3.7x 7.5x 4.9x 4.5x 3.5x 8.4x 4.7x 3.5x 1.4x 3.5x 6.6x 6.4x 6.1x 87.5x 2.9x 2.2x 6.3x 6.9x 3.6x 7.5x 2.6x NM 4.3x 4.6x 2.6x 2.6x NM 6.3x 16.8x NM 4.6x 10.6x 2.3x Trend NM 5.8x 6.7x 8.4x 11.4x 11.9x 3.7x 8.1x 12.2x 9.9x 6.3x 7.2x 13.6x 6.3x 3.4x 7.0x 8.6x NM 9.6x 10.5x 10.6x 4.0x 5.9x 8.2x 7.1x 5.9x 7.4x 8.9x 5.0x 5.3x 2.8x 4.9x 9.9x 83.7x 6.9x NM 3.9x 3.1x 7.6x 9.3x 7.2x 8.1x 5.9x NM 4.7x 5.6x 8.6x 5.0x NM 12.4x 31.4x NM 10.1x 12.0x 10.6x So urce: Capital IQ, LCC research IMPORTANT DISCLAIMER This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be, nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made. Page 2 /2

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