The Maas Group Holdings Ltd (ASX: MGH) share price is soaring today after the company shared news of 3 acquisitions.
After peaking at an intraday high of $4.30 this morning, the Maas share price is trading at $3.88 at the time of writing, up 11%.
Let's take a closer look at today's news from the construction materials, equipment and service provider.
New acquisitions
Maas Group announced today it will purchase Amcor Excavations Pty Ltd, Amcor Quarries and Concrete Pty Ltd, and Willow Tree Gravels.
The cash components of the purchases will be funded with Maas' existing debt facilities and cash on hand.
While each company comes with its own set of conditions, Maas expects all 3 acquisitions to be completed in May 2021.
Amcor Excavations and Amcor Quarries
Maas will spend around $12.7 million in cash to acquire both Amcor Excavations and Amcor Quarries, with a cash contingent consideration of up to $2 million payable on the occurrence of future milestones.
Amcor Quarries operates a leasehold quarry as well as fixed and mobile concrete batching plants near Rockhampton, Queensland.
Amcor Excavations is a plant hire business near Moura, Queensland. It mostly provides plant hire services to the gas fields of the Western Downs region.
Maas plans to expand Amcor Excavations to take advantage of opportunities in the region.
As well as cash, Amcor will gain approximately 1.4 million Maas shares, issued in 2 instalments – half on the acquisition's completion and the other half 2 years later. The company states that, based on yesterday's closing price, the share consideration is valued at approximately $4.9 million.
Roughly 100 employees will transition to Maas on completion of the 2 Amcor acquisitions.
Willow Tree Gravels
Willow Tree Gravels is a quarry located in the New England region of New South Wales. It provides a range of materials and services to local councils, state authorities and commercial road and rail contractors.
Maas advised it would pay $10 million in cash to purchase Willow Tree Gravel. It claims the acquisition is an asset purchase, as the business comes with land, plant and equipment assets.
Willow Tree's 12 employees are expected to transition to Maas on completion of the acquisition.
Commentary from management
Maas Group's managing director and CEO Wes Maas welcomed the 3 private, family-owned businesses to the group as it executes its growth strategy. He said:
The acquisition of the Amcor businesses represents a significant milestone for [Maas Group Holdings] as it allows us to expand our operating footprint into Regional Queensland at a time of growing infrastructure and project development expenditure in that market.
The acquisition of Willow Tree is an important step in the expansion of our east coast footprint for our quarry operations and provides us with a premier operation with well established relationships in the New England region.
Maas Group share price snapshot
The news has provided another boost to the Maas Group share price, which has performed well in its first year on the ASX.
Since its initial public offering (IPO) in December 2020, the Maas share price has risen by 45%.
Currently, the Maas Group share price is up 48% year to date.
The company has a market capitalisation of around $924 million, with approximately 264 million shares outstanding.
