Murray & Roberts buys JJ White to further its US expansion
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MURRAY & Roberts Holdings (M&R) is acquiring US multi-trade contractor and engineering firm JJ White Incorporated for $28.25 million (R423m) as part of its strategy to diversify and expand the services of its energy, resources and infrastructure business platform in North America.
M&R subsidiary, Clough North America Holding, is acquiring all the shares in JJ White from James White IV and Trusts.
“The acquisition builds an immediate robust entry into new territories and new markets and will leverage JJ White’s existing customer base to expand Clough’s engineering, procurement and construction services and footprint across the US,” M&R said in a statement yesterday.
JJ White is a private, fourth-generation multi-trade engineering and contracting business, headquartered in Philadelphia, Pennsylvania.
“It has a tradition of excellence in the Mid-Atlantic, Mid-Western, and New England construction industries dating back to its founding in 1920 and the company is licensed to deliver its services in 22 states,” M&R said.
It specialises in industrial maintenance and related construction services that covers mechanical and electrical disciplines.
The company has an in-house fabrication facility, and its capability includes the design and fabrication of American Petroleum Institute 650 oil storage tanks.
M&R said the strategy for the energy, resources and infrastructure platform was similar to the recent market sector diversification in the Asia-Pacific region, which had seen significant order book growth over the past three years.
“This investment presents significant growth potential and opportunity for market share expansion and is expected to provide strong returns,” M&R said. The deal would be funded through existing cash resources.
The value of net assets being acquired is $8.5m of net working capital, $3.7m of fixed assets and $16m of intangibles. An average four-year earnings before interest, tax, depreciation and amortisation of $5.1m to December 31, 2020, on a normalised basis and adjusted for one-off, non-recurring items, was attributable to the net assets being acquired.
M&R’s share price closed 0.07 percent lower at R13.73 on the JSE yesterday.