Vysarn (VYS) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of CMP Consulting Group establishes a national presence, diversifies service divisions from 5 to 7, and reduces reliance on the WA resources sector, increasing exposure to government and utility clients, especially on the East Coast.

• CMP's focus on water infrastructure consulting aligns with major investment programs in Victoria, NSW, and QLD, positioning the group to benefit from a generational infrastructure boom.

• CMP's established client base and expertise in water engineering strengthen market position and diversify the client portfolio.

• Combined with the pending WWS acquisition, the group gains exposure to a $50+ billion water infrastructure market across Australia's largest states over the next decade.

• The acquisition supports a vertical integration strategy, embedding the group in all major phases of the water service value chain.

Financial terms and conditions

• Upfront consideration totals $24.0m in cash plus 10.0m shares, with up to 30.0m deferred shares over three years, subject to EBITDA targets.

• The deal values CMP at an EV/EBITDA multiple of 4.6x and EV/EBIT of 4.7x.

• Deferred shares are issued upon achieving annual EBITDA targets: $5.5m (Y1), $6.0m (Y2), $6.5m (Y3), with additional shares for cumulative targets or certain accelerating events.

• All shares issued to CMP vendors are escrowed for 12 months following the year of issue.

• The upfront cash component is funded by a $38.2m placement at $0.40 per share, representing a 15.8% discount to the last closing price.

Synergies and expected cost savings

• The acquisition is expected to be immediately EPS accretive: 22.1% based on FY24 pro forma financials, reducing to 18.6% if all future performance milestones are achieved.

• Pro forma FY24 NPAT increases by $4.19m (+52.6%), with revenue up $26.4m (+34.9%).

• The deal supports a capital-light business model and broadens the client base for stable, long-term earnings growth.

• No explicit synergy savings quantified, but cross-selling and operational efficiencies are targeted.

• EPS accretion rises to over 35% when including WWS.