Major Central Qld businesses merge in $50 million deal
TWO LEADING Central Queensland firms are merging as part of a $50 million dollar deal.
SMW Group, one of Rockhampton's major mining and industry service firms, employing more than 320 people, is joining forces with Mackay's BAE Engineering, which has a workforce of 70, to form a new parent company SMW Group Limited.
New Zealand Venture capital firm Aorere Resources Limited (AOR) entered into an agreement in April to acquire SMW Group Limited for a price of about NZ $53 million ($49.5M AUD), to be paid through an issue of new AOR shares.
SMW's Rockhampton-based director Jack Trenaman will remain on the board.
SMW was founded in 2010 and is a diversified mining support and industry services provider, focused on the key operations of heavy fabrication and engineering, field services and abrasive blast and paint.
BAE Engineering provides specialised mining support services, mineral processing equipment and solar power to the mining and construction industries.
The new parent company, subject to receiving final approvals, will be listed on the NZX Market in New Zealand as SMW Group Limited (NZX: SMW), with a view to eventually be listed on the ASX.
"The merger represents an exciting step in the growth of the company, as well as an expansion of our ability to deliver services to our existing client," SMW Group founding partner Mr Trenaman said.
"Our business's footprint will now cover Mackay and Rockhampton, meaning that we can provide services to the Bowen Basin and major projects in a faster, smarter and more efficient manner.
"As we expand our potential, this also means we will be able to work with customers in new and improved ways.
"Whether this looks like an expansion to our field service offering, new projects in civil or defence or even duplicating our successful industrial ¬cleaning or solar power divisions in a new location, we'll be on the lookout to provide maximum value to our customers in the simplest way possible."
The chair of the newly formed public listing will be Chris Leon, a veteran industrial leader with listed company experience in Australia and Asia.
Queensland Resources Council CEO Ian Macfarlane noted a public listing amid a COVID-19 pandemic showed the importance and enormous resilience of the resources sector in CQ.
"Agriculture and resources have been the backbone of the economy and will continue to drive this state forward," he said.
"As the world's largest coal exporter, and potentially the world's largest LNG exporter around the turn of the decade, Australia is an energy superpower with over 280 years of black coal, 50 years of gas, and 30 years of oil at current production rates.
"The long-term outlook for metallurgical coal, which accounts for two-thirds of Australia's total coal export earnings, is positive.
"There is no proven competitive substitute for metallurgical coal in blast-furnace steelmaking and the ongoing urbanisation and industrialisation of emerging Asia will require steel.
"These are all opportunities for companies like the SMW Group to grow and expand with the industry.
"I commend them on their vision and look forward to seeing their expansion in the region."
Queensland Senator Matthew Canavan noted the importance of the resources industry in CQ, and how pivotal growth in the sector was to all Queenslanders
"SMW have grown from a small partnership employing five people to their current size at over 320 staff and some of the smartest technology in the region," he said.
"The mining sector is the bedrock of CQ, delivering nearly 12,000 full time jobs and inputting $3.4 billion into our local region.
"This is on top of the $5.2 billion in royalties that's shared throughout Queensland.
"SMW is a pivotal supporter of this industry.
"With their field and local maintenance and manufacturing staff, they are ensuring that mines are continuing to run and resources are continuing to deliver for our region and with this new partnership, they will only keep growing our local economies and employing regional Queenslanders."
Michelle Landry MP commented that "Jack, Frank and Scott are a part of the fabric of this community and continually giving back".
"The resources are in Central Queensland, the work is here and companies like Adani and the SMW Group have the confidence to invest in Central Queensland," she said.