KUALA LUMPUR: Sime Darby Bhd’s indirect wholly owned subsidiary, Sime Darby Allied Operations Pty Ltd (SDAO), has entered into an agreement to acquire the entire issued share capital of Onsite Rental Group Ltd for a cash consideration of A$635 million (RM1.915 billion).
SDAO had on March 1, 2023, entered into a share sale agreement with various persons and entities, Sime Darby said in a filing to Bursa Malaysia today.
“Onsite is one of the largest business-to-business (B2B) equipment rental service providers in Australia, servicing primarily the mining and construction industries,” it said.
Sime Darby said the parties have agreed that the growth capital expenditure (capex) spent by Onsite Group from Oct 1, 2022 up to completion will be borne and reimbursed by SDAO, on the basis that the expenditure was spent on acquiring new assets that generate future incremental earnings.
“For illustration, the estimated growth capex amount (based on actual spend up to Jan 31, 2023) and forecast for 2023 is about A$20.5 million (RM61.9 million),” it added.
The company also said that there is currently a loan note outstanding of about A$286.5 million (RM864.4 million) which was issued by Onsite in 2017 and become payable by shareholders on their exit.
On the funding of the acquisition, Sime Darby said the proposed acquisition is intended to be financed entirely through external borrowings.
“On the rationale of the acquisition, the acquisition of Onsite represents an opportunity for the group’s industrial division to enter the B2B rental services market through an established, sizeable and reputable provider with an established platform for future growth,” it said.
The acquisition complements the industrial division’s existing rental offering through Salmon Earthmoving and Hastings Deering across the industrial equipment rental spectrum in Australasia, it added.
“Further, the proposed acquisition offers Sime Darby greater access to the construction, energy, and mining industries’ growth in Australia,” the company said. – Bernama
