The deal, which values Geotech at €188 million, accelerates ACCIONA's expansion in a market with great potential for infrastructure development
ACCIONA has reached an agreement to acquire Geotech, an Australian engineering and construction group. The deal, which values Geotech at 262 million Australian dollars (188 million euros), will enable ACCIONA to accelerate its expansion in a market with great potential for infrastructure development.
The deal includes a cash payment of 197 million Australian dollars (141 million euros). In addition, three key Geotech executives will receive a 17.6% stake in a new subsidiary, ACCIONA Geotech Holding. The new company will integrate Geotech and ACCIONA’s future pipeline of construction projects in Australia. ACCIONA Construction will control 82.4% of the new subsidiary.
The deal seeks to build upon ACCIONA Construction and Geotech’s complementary businesses, and to create a platform for growth that can respond to the sizeable demand for infrastructure in the Australian market, estimated at 125 billion Australian dollars (90 billion euros) over the next decade.
ACCIONA Construction brings its global expertise in the execution of large projects of great technical and financial complexity, and its capacity to manage large civil engineering projects.
Geotech brings its track record, backlog and know-how in mid-sized projects in Australia, a strongly established local footprint and technical capabilities that have made it a highly-valued subcontractor in large projects, particularly railway works.
The new ACCIONA subsidiary will also benefit from value chain integration, since it will offer Australian clients a holistic, all-encompassing service, from the development of large projects up to final execution. Another advantage is that the two companies dovetail geographically: ACCIONA Construction's footprint in Australia is concentrated in Queensland and New South Wales, while Geotech is strongest in Victoria, although it operates nationwide. The new company will be based in Melbourne.
The fact that Geotech’s management shareholders are staying on as shareholders and executives of ACCIONA Geotech Holding adds considerable value to the deal, as the ambitious growth plan for the new company is based on combining strengths, talent and know-how by an integrated management team with deep market knowledge.
The Geotech Group was founded in 1972 by Gerry Noonan and Jeff Macleod. The company, which specialises in construction engineering in Australia, is now a leading supplier to large construction companies such as ACCIONA. As well as an established presence in Victoria, it has offices in Sydney, Brisbane, Adelaide and Perth. Its headquarters are in Melbourne, where it also has maintenance and equipment development workshops.
With a headcount of 550, the company is noted for its ability to undertake technically complex projects. The group comprises three specialised subsidiaries: Geotech Pty Ltd (civil engineering), Coleman Rail Pty Ltd (railway construction) and John Beever Pty Ltd (industrial engineering).
A family-run firm, Geotech has been involved in large infrastructure projects such as Victoria Regional Rail and Adelaide Metro. Among other projects, it is currently building Sydney Light Rail, in partnership with ACCIONA.
ACCIONA has been operating in Australia since 2002, where it is involved in Infrastructure (Construction and Water) and Renewable Energy projects.
In Construction, ACCIONA built the Legacy Way tunnels in Brisbane, and is currently building the Toowoomba Second Range Crossing, the Warrell Creek - Nambucca Heads section of the Pacific Highway, the Clarence River Bridge, and Sydney Light Rail. In the Water sector, ACCIONA is member of the consortia that designed, built and currently operates the Adelaide desalination plant and the Mundaring drinking water plant. Early this year, in partnership with Australian company Monadelphous, ACCIONA was awarded the contract to design, build and operate the extension of the Kawana waste water treatment plant in Queensland and, in partnership with BMD, it has been awarded the contract to expand the Kingsborough waste water treatment plant in Tasmania, worth 39 million Australian dollars.
In the Energy sector, ACCIONA expects to begin the construction of Mt Gellibrand 66 MW wind farm this year. Once operational, the farm will produce enough power to meet the electricity needs of 60,000 households while avoiding the emission of 200,000 tons of CO2 from coal-fired plants each year.
Mt Gellibrand will be ACCIONA Energy's fourth wind farm in Australia, after Cathedral Rocks (64 MW in South Australia), Waubra (192 MW in Victoria) and Gunning (46.5 MW in New South Wales). Australia, where ACCIONA has 302.5 MW, ranks fourth in ACCIONA's portfolio of wind assets, after Spain, the USA and Mexico. In addition to developing company-owned facilities, ACCIONA built and commissioned a photovoltaic plant near Canberra for third parties, with a rated capacity of 20 MW (24 MWp).