Dan Crowley’s Avada adds to its acquisition bounty
ASX-listed traffic management operator Avada Group is back on the acquisition trail, inking a binding agreement to pick up the assets and business operations of STA Traffic Management.
The transaction was pitched to potential investors on Tuesday alongside a $6 million capital raise via a two-tranch institutional and condition placement to fund the $7.6 million acquisition. Avada’s directors have committed to subscribe for the $1.2 million conditional placement.
Traffic management company Avada Group has made a series of acquisitions since listing in 2021. Jason South
The raise, shepherded by Unified Capital Partners and Morgans, was priced at 60¢ a pop, representing a 27.7 per cent discount to the last close price and a 21.8 per cent discount to the three-month volume weighted average price.
A presentation seen by Street Talk positioned STA as one of the top five traffic management companies in Victoria, with 250 traffic controllers and 83 traffic management vehicles. The company pulled in $24 million in revenue at a 23 per cent gross margin and EBITDA of $2.8 million in the 12 months to April 2023.
Avada, which added Victorian traffic management company Construct Traffic in August 2022 for about $30 million, expects to see synergies and integration benefits flowing from the acquisition, alongside increasing scale in the Victorian market. The expected financial impact is an additional $2.8 million to Avada’s forecast $22 million group EBITDA in FY24.
The deal follows Avada’s entry into the New Zealand market after it acquired Wilsons Traffic Management in April. Street Talk understood Avada will pay $NZ15 million ($14 million) for the South Island-based company, comprising an upfront consideration of $NZ9.6 million and
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