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Highlights:

  • SND to acquire 100% of Aqua Metro for up to AUD 30.0 million with staged consideration
  • Saunders International expands infrastructure footprint through acquisition of Victoria-based water services firm
  • SND to fund deal through placement, new debt facility, and existing cash reserves

Saunders International Limited (ASX:SND) has announced a Share Sale Agreement to acquire 100% of Aqua Metro Pty Ltd and its associated entities in a transaction valued at up to AUD 30.0 million. The deal is expected to complete in the first quarter of FY26, subject to standard closing conditions.

Aqua Metro, based in Victoria, specialises in delivering integrated services to the water infrastructure sector. The acquisition marks Saunders' entry into this segment, with Aqua Metro bringing project delivery capabilities across hydraulics, civil, mechanical, and water infrastructure. The business operates across both urban and rural areas and maintains long-term program and project agreements with government agencies and utilities.

Aqua Metro currently services clients under four water authority framework panels, with average expiry terms running through to 2028. Its FY25 forecast includes AUD 102 million in revenue and AUD 8.2 million in EBITDA, with projected FY26 revenue of AUD 135 million and EBITDA of AUD 11 million. The acquisition is expected to be earnings per share (EPS) accretive for Saunders in FY26 based on Aqua Metro’s FY26 budget.

The deal includes an initial consideration of AUD 18 million, comprising AUD 11 million in cash and AUD 7 million in Saunders shares, the latter of which will be issued in two tranches. The first tranche will be issued under Saunders' existing 15% placement capacity, while the second tranche is subject to shareholder approval at the company’s upcoming Annual General Meeting.

An earn-out component of up to AUD 12 million is also included in the agreement, based on Aqua Metro’s average EBIT for FY25 and FY26. If fully achieved, the earn-out will consist of AUD 7 million in cash and AUD 5 million in Saunders shares, both subject to a 12-month escrow. This performance-based structure is intended to align incentives between the parties and ensure continued operational delivery post-transaction.

The acquisition will be funded through a AUD 5 million institutional placement, a new AUD 10 million debt facility with CBA (of which AUD 8 million will be drawn), and existing cash reserves. The placement was made to two of Saunders’ existing shareholders  Ahrens Group and Anacacia Capital  and will result in the issue of approximately 7.69 million new shares. These shares will rank equally with existing shares.

The debt facility is secured against Saunders’ assets and real property and is structured with a three-year term and a seven-year amortisation period. Interest will be charged at 2.7% above BBSY. Quarterly financial covenant reporting will be required, including the monitoring of the Debt Service Cover Ratio and Adjusted Leverage Ratio.

The agreement includes standard closing conditions such as regulatory approvals, confirmation of warranties, and non-occurrence of any material adverse changes in Aqua Metro’s business. Following completion, Aqua Metro’s leadership team will remain in place. Manish Pancholi will join Saunders’ executive leadership as Executive Vice President – Saunders Aqua Metro. The team will continue to lead local operations out of Victoria, maintaining continuity of service. Saunders and Aqua Metro have a history of collaboration on past projects, and this acquisition formalises that relationship while expanding Saunders’ national reach in infrastructure services.

SND trading at 8.28 % higher at AUD 0.85 per share as on 16 july 2025.