SSH expands fledgling equipment division

PERTH-based integrated services company SSH Group has struck a deal to buy the Pilbara’s largest home-grown plant hire company.
SSH expands fledgling equipment division SSH expands fledgling equipment division SSH expands fledgling equipment division SSH expands fledgling equipment division SSH expands fledgling equipment division

Haydn Black

Reporter

SSH will acquire 100% of Karratha Machinery Hire, and its fleet of more than 140 units that service Western Australia's northern construction, civil and mining markets, for A$15 million, primarily in cash.
 
The company expects to meet the immediate up-front consideration from cash reserves, while the $10.5 million for the fleet is expected to be provided by an equipment financing loan with a major Australian bank.
 
SSH described the purchase of KMH as transformational and earnings accretive, and as "a compelling synergistic opportunity" for SSH to rapidly expand its fledgling equipment division, which did not contribute to SSH's record 2021 revenue result of $90 million or its record $51.7 million first half of 2022 result.
 
KMH's fleet offers short-term and long-term hire to tier one clients, such as NRW Holdings, MACA and Monadelphous.
 
SSH Group's combined pro forma EBITDA post-acquisition for FY21 would be $6.2 million, and for the first half of 2022 would be $3.85 million, representing a 121% increase on SSH's reported EBITDA.
 
KMH will remain under the operational control of KMH's management team, led by founder Phil Patterson.
 
The deal is expected to close in mid-May.
 
SSH has indicated it sees significant growth potential for its equipment division 
 
SSH shares were up 8% this morning to 26c, valuing it at $14 million.
 
It has traded between 20-35c since listing in September 2021.