Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM Team, Please can you provide your thoughts on the current Acrow (ACF) capital raise. Recently you suggested that infrastructure was an area of the market worth considering for investment. Does ACF fit the mould as an infrastructure play? Thanks, JanP
Hi Jan,
Acrow is a $285mn construction and infrastructure services company that provides scaffolding, formwork and modular bridge solutions to major building, civil and mining projects across Australia. The group benefits from infrastructure spending and large-scale construction activity, generating recurring revenue from equipment hire and project services. However, we wouldn’t classify it as traditional infrastructure play per se.
In terms of its $70mn capital raise this was completed at 85c, around 5-6% below where the stock was trading on Friday. The funds are for the acquisition of Ausgroup Industrial Services and Preston SuperDeck business, as well as for its debt reduction program.
The company has also announced a Share Purchase Plan (SPP) targeting up to $10 million, giving existing retail shareholders the opportunity to participate on the same terms, i.e. buying into ACF at 85c – if we held ACF we would take up the SPP.
The Brisbane Olympics infrastructure pipeline is a genuine multi-year earnings tailwind, Industrial Access already accounts for ~60% of group revenue and is the primary growth engine, and the recent acquisitions are priced at sensible multiples — Preston SuperDeck at 4x EV/EBITDA is undemanding. Hence, we see value in ACF back at 85c.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
