NRW Holdings (NWH) investor relations material

Deal rationale and strategic fit

• Acquisition adds a strategic fourth pillar (EMIT), expanding capabilities in electrical, mechanical, HVAC, infrastructure, and technology services, and diversifying into high-growth sectors like energy transition, electrification, automation, and digital innovation.

• The deal enables entry into new addressable markets, leveraging existing relationships for cross-selling, and enhances exposure to major infrastructure projects.

• Fredon/Freedom brings a capital-light, cash-generative model with a strong track record, national footprint, and 2,500 skilled staff, supporting stable, scalable growth and annuity-style revenues.

• Strong cultural alignment and complementary capabilities enhance the combined group’s reach across Australia, New Zealand, Canada, and the US.

• Management views the acquisition as transformational, with significant long-term growth potential and robust market positioning.

Financial terms and conditions

• Maximum consideration of up to $200 million, including $122 million initial cash, $45–$60 million earn-out based on FY25 EBIT, and up to $18 million deferred for two years post-completion.

• Implied acquisition multiple is 5.2x normalized EBIT/EV, considered attractive relative to sector peers.

• Funded from undrawn/existing debt facilities and business-generated cash; short-term increase in gearing expected, with a return to target levels (below 30%) due to strong cash flow.

• CapEx requirements are light, running $3–$5 million annually, with similar depreciation.

• Economic effective date is 1 July 2025, with anticipated completion on or before 30 September 2025.

Synergies and expected cost savings

• No cost synergies or management changes planned; focus is on revenue synergies, leveraging relationships, and cross-sector growth.

• Immediate EPS accretion anticipated, with clear visibility on FY26 earnings and high cashflow generation to support deleveraging.

• Targeting a 6% EBIT margin for Freedom/Fredon over time, in line with sector peers.

• Significant opportunity to expand services into the resources sector and cross-sell across the combined client base.

• Enhanced ability to leverage combined capabilities for expanded service delivery.