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Highlights
  • AU$53.5M Acquisition: SCEE to acquire 100% of Force Fire Holdings, with an upfront payment of AU$36.3M and performance-based earnouts.

  • Strategic Expansion: Deal strengthens SCEE’s presence in the fire safety sector, leveraging complementary capabilities.

  • Financial Impact: Force Fire projected to generate AU$106M in revenue for FY25, with acquisition expected to boost SCEE’s earnings.

Southern Cross Electrical Engineering Limited (ASX:SXE) has signed a Share Purchase Agreement to acquire Force Fire Holdings Pty Ltd for a total consideration of up to AU$53.5 million. The deal includes an initial payment of AU$36.3 million, with additional earnouts tied to EBIT growth targets for FY26 and FY27. The transaction is expected to be finalized on April 1, 2025, and will be funded entirely through SCEE’s existing cash reserves.

Strategic Rationale: Expanding into Fire Safety

This acquisition aligns with SCEE’s long-term strategy to diversify into adjacent and complementary sectors, with fire safety services being a natural extension of its core electrical expertise.

Force Fire specializes in maintenance and recurring fire safety services, which already contribute 30% of its revenue. This business model provides steady income streams and growth opportunities, positioning SCEE to capitalize on cross-selling opportunities and expand in the commercial and industrial fire safety market.

Financial Outlook: EPS Growth and Revenue Boost

The acquisition is expected to have a significant positive impact on SCEE’s financial performance. Force Fire is forecasted to generate:

  • AU$106 million in revenue and AU$8.3 million in EBIT for FY25.

  • EBIT growth to at least AU$10 million in FY26.

SCEE projects that the acquisition will lead to an 18% increase in earnings per share (EPS) on a pro forma FY25 basis.