Duratec will acquire New South Wales-based welding and fabrication firm Pacific Welding Australia for up to $12 million in a move which gives the company access to Orica's Kooragang Island ammonia and nitric acid facility.
The Wangara-based engineering firm told the market on Thursday it would pay $6 million upfront to acquire 100 per cent of Davhold Australia Pty Ltd, trading as PWA, with a further $6 million maximum under an earn-out payable at the end of FY28.
That second payment will be contingent on the company hitting a combined FY27 and FY28 EBITDA of $6.4 million.
In FY25, the company recorded EBITDA of $1.67 million.
Duratec 180-day share price chart
The acquisition would be funded from existing cash reserves and bank facilities.
Duratec managing director Chris Oates said the acquisition would enhance Duratec's capabilities and service offerings nationally.
"PWA is uniquely aligned to the services of WPF and provides a fantastic opportunity to scale WPF's specialist expertise and self-perform model, while enhancing our service offering within the Energy, mining and industrial sectors," he said.
"This targeted acquisition further established WPF's East Coast base and is a continuation of our expansion strategy within these sectors, delivering on our commitment to growth and sustainable returns for our shareholders."
PWA was established in 2010 and specialises in welding, mechanical services and specialist fabrication in oil and gas, energy and mining.
It employs some 60 people and operated out of a 1,000sqm workshop in Newcastle.
The move marks the latest in a string of acquisitions by Duratec, including of industrial painting and coating contractor Hunter Coatings Pty Ltd, also based in the Hunter Valley, as well as WA-based inspection and maintenance provider RGK Resources Pty Ltd.
Duratec in February posted a first half net profit after tax of $13.4 million, up 3.5 per cent on the same period the year before.
That was despite revenue dipping 4.9 per cent to $273.3 million.
Duratec shares are currently trading at $2.74 per share.
