Specialist resources services provider Babylon Pump & Power (ASX:BPP) has entered into a binding agreement to acquire privately held Matrix Hydro Services.
The acquisition requires an upfront consideration of $2.5 million, based upon a 2.27x EBITDA multiple of FY26 forecast with an additional $1.1 million deferred, payable based on achieving said forecast.
The total transaction value represents a 3.27x EBITDA multiple on FY26 forecast.
Babylon will also undertake an accelerated non-renounceable entitlement offer to raise $3.5 million. Cumulus Wealth is lead manager to the offer and Leeuwin Wealth co-manager.
The company’s key shareholder group has indicated its intention to accelerate $1.08 million of entitlements
Matrix is a specialist provider of aquifer testing and groundwater management services to Western Australia’s resources sector. Babylon says the acquisition strengthens its water management capabilities and supports its strategy to deliver integrated, high-margin services to tier-one mining clients.
The acquisition is subject to the satisfaction of various conditions precedent including, but not limited to, Babylon having satisfactorily completed its due diligence enquiries in relation to Matrix, and there being no material adverse change impacting Matrix.
Matrix founders Blair McDiarmid and Michael Townley will join Babylon’s management team once the deal has been completed.
Babylon CEO Michael Shelby says Matrix’s management brings decades of hydrogeological field experience and will bolster the company’s capability in delivering turnkey water management solutions.
Shelby says the Matrix acquisition will significantly enhance Babylon’s ability to serve its clients, “bringing together highly specialised diagnostic services with our existing rental and maintenance platforms”.
“With Blair and Michael on board, we are doubling down on our commitment to deliver insight-driven, high-integrity water solutions to WA’s major resource developers,” Shelby says.
“The acquisition terms represent another fiscally disciplined acquisition for Babylon.”
Write to Adam Orlando at Mining.com.au
Images: Babylon
