Construction and building services company Johns Lyng Group (ASX: JLG) has continued its excellent run of form over the past 12 months, today announcing the acquisition of the majority stake in complementary service provider Air Control Australia.
The acquisition of 60% in Air Control Australia for $1.6 million cash and $300,000 of JLG equity will give Johns Lyng a controlling interest in the Melbourne-based heating, ventilation and air conditioning service business with an established clientele of blue chip companies including Hyatt, Pullman, and Miele.
“Air Control represents another attractive bolt-on for the Group, offering major cross-sell opportunities for our existing businesses,” said Johns Lyng CEO, Scott Didier AM.
“This includes adding capability to our core Insurance Building and Restoration Services segment, through addressing the broader maintenance requirements of Air Control’s clients.
“We can also leverage Air Control’s offering through our existing client base, including enormous cross-selling into the strata market through our subsidiary Bright & Duggan.
“This is undoubtedly another very promising step in the Johns Lyng growth strategy.”
With the core business of Johns Lyng being Insurance Building and Restoration Services, the company reported an earning upgrade last month with additional business coming from the Townsville floods of 2019.
The 5% increase on guidance lifted revenue expecations to $420m and EBITDA expectations to $32m, an 11% increase on earlier guidance.
Beyond their core business, Johns Lyng expanded notably in August 2019 with the 51% acquisition of Strata Management firm Bright & Duggan from retiring co-founder Phil Duggan for $13.8m cash. At the time of acquisitions, Bright & Duggan had been forecast to contribute $4.5m EBITDA to Johns Lyng for FY20.
Integrating Bright & Duggan into Johns Lyng as a subsidiary, the Group further expanded their strata management footprint with the acquisition of Queensland-based Capitol Strata, with Bright & Duggan paying $7m cash for an 85% stake.
Today’s acquisition of Air Control Australia is expected to be completed by mid-March with Didier intending to use the existing Johns Lyng network to expand the Melbourne-centric heating and ventilation business nationally.
Since listing on the ASX in October 2017 following an oversubscribed IPO at an offer price of $1.00 per share, shares in JLG have surged today to an all-time high of $2.82. This includes a rise of 110% over the past 12 months with Johns Lyng having secured key insurance business from natural disasters in recent times.
The Company has not reported any activity in relation to the 2019/20 ‘Summer from Hell’ bushfires.