Tasmea (TEA) M&A Presentation summary

Transaction overview

• Tasmea will acquire 100% of Future Engineering & Communication Group (FEG) for A$84.5 million, including A$52.5 million upfront, A$17.5 million in escrowed shares, and an uncapped earn-out based on 37.7% of FEG's NPAT for FY2025–FY2027.

• Funding comes from existing cash, Tasmea equity, and a new A$50 million debt facility, with earn-outs paid from FEG's future profits.

• Settlement is expected on 30 August 2024.

Strategic rationale and benefits

• Acquisition leverages surging electrification demand in Australia, supporting renewable energy integration and grid stability.

• Expected to be highly EPS accretive (~21%) and delivers significant revenue synergies with Tasmea's subsidiaries.

• Strengthens Tasmea’s specialist trade skills and expands its end-to-end electrical service offering.

• Enables cross-selling opportunities due to minimal customer overlap between FEG and existing Tasmea businesses.

FEG business profile and performance

• FEG is a specialist electrification business established in 1992, with ~140 employees and a diverse customer base across energy, telecommunications, mining, and construction.

• Offers design, supply, installation, and maintenance of communication structures and high-voltage powerline infrastructure.

• Achieved 10% revenue CAGR and 28% EBIT CAGR from FY2021 to FY2024.

• Top 10 customers account for 41% of FY2024 revenue, indicating a diversified revenue stream.