Seven Group Holdings swoops on 100% Coats Hire ownership

Seven Group Holdings swoops on 100% Coats Hire ownership”

It's been talked about for years, mentioned for months and then negotiated for nearly as long - or so it seems from the numbers of reports to that effect - we are talking about Kerry Stokes' key company, Seven Group Holdings finally buying the 53% of Coates Hire it didn't own from Carlyle Group and others for $517 million.

Seven Group on Wednesday announced it would acquire the remaining 53.3 per cent interest in Coates Hire from affiliate Carlyle Asia Partners II, a fund managed by The Carlyle Group, and minority owners for $517 million.

The deal with the US-based private equity firm Carlyle Group will be funded via existing debt facilities and available cash, including proceeds from the sale of WesTrac China, about $516 million after tax.

SGH had bought the other 46.7 per cent stake in Coates Hire in 2008.

Coates Hire offers a range of products, including earthmoving and access equipment, across its over 200 branches Australia-wide.

Seven said the acquisition would increase its fiscal 2017 underlying earnings per share by 15 percent and increase pro-forma core pre-tax profit to A$415 million from A$297 million. In fiscal 2017 it recorded nearly $920 million of total revenue and other income, and underlying earnings before interest, tax, depreciation and amortisation of $308 million.

"The acquisition provides SGH with increased exposure to the Australian and east-coast infrastructure sector, with Coates Hire well positioned to benefit from the increased number of projects and the resultant demand for construction equipment and heavy machinery".

Seven Group has said that total ownership of Coates will enhance the company's portfolio by expanding its industrial services division with the addition of an operating business.

Seven Group managing director Ryan Stokes said the company was pleased to reach agreement with Carlyle to acquire the remaining Coates shares.

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