ASX industrials stock GenusPlus Group Ltd (ASX: GNP) has been among the best shares to own over the past year.
The company is a service provider to mining, utilities and other private customers who have needs across electrical plant and equipment, power, and telecommunications infrastructure.
Its share price has almost risen 200% in the last year.
This includes a 32.26% increase for the year to date.
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Key acquisition
This ASX industrials stock was making headlines yesterday after it announced it had entered into an agreement to acquire 100% of Railtrain Holdings Pty Ltd (Railtrain).
The deal is for a total consideration of up to $55.0m.
According to the release from GenusPlus Group, it was a highly logical acquisition that bolsters Genus' existing MGC rail business. It will add critical scale, diversification and national presence, as well as expanding service capabilities in the rail sector.
Speaking on the acquisition, Genus Managing Director, David Riches, said:
I am pleased to announce the signing of binding documentation for our acquisition of Railtrain which is another step forward in our strategy to expand into the rail infrastructure sector. Railtrain is a highly logical acquisition which will add critical scale, and expands the geographical and service capability of our existing MGC rail business.
The transaction is expected to be completed by the end of March 2026.
Bell Potter weighs in
Following the announcement, Bell Potter released a new report with updated guidance on the ASX industrials stock.
It said Railtrain is a diversified rail service provider, with capabilities including overhead wiring solutions, rail maintenance and construction, track protection services, rail signalling and electrical and rail surveying.
Railtrain has a national footprint with approximately 300 staff across offices and depots in three states.
EPS changes reflect Railtrain acquisition accretion over FY26-28: +1%/+7%/+6%.
The broker said it is particularly pleased to see an attractive acquisition multiple of 2.75x EBITDA (assuming all earn-out hurdles are satisfied), which implyies significant valuation arbitrage against the company's pre-acquisition FY26 multiple of 14.3x). Bell Potter also drew attention to an enhanced EBITDA margin outlook as well as immediate earnings accretion.
Price target upgrade
In yesterday's report, Bell Potter retained its buy recommendation on this ASX industrials stock.
The broker also increased its price target to $9.50 (previously $9.00).
From yesterday's closing price of $8.20, this indicates an upside of almost 16%.
GNP is making another great acquisition, solidifying its track record for delivering a highly accretive M&A strategy, and complementing its strong organic growth.
