Western Australian-based engineering and construction company Lycopodium (ASX:LYL) has acquired a 60% interest in Argentina-headquartered engineering firm SAXUM for US$7.1 million.
Lycopodium Managing Director Peter De Leo says the acquisition will enable the company to establish a “material footprint” in Latin America to complement its Lima office as well as supporting Lycopodium’s ingress into the US market.
The acquisition will be fully funded from existing cash reserves.
SAXUM, which was founded in 1966, is a multi-disciplinary engineering and project management services company, providing services to the mineral processing, cement and lime, manufacturing and infrastructure and oil and gas sectors.
The organisation has over 100 employees across four companies operating in Argentina, Brazil, the US and Australia.
Lycopodium, which has a market capitalisation of around $460 million, has the option to further increase its ownership in stages. The company can acquire another 25% interest on the fifth anniversary of the completion of the initial acquisition and the remaining 15% on the seventh anniversary.
The company says SAXUM has no debt and will contribute immediately to its revenue and profitability.
“SAXUM will continue to be managed by the incumbent leadership team and our new partnership positions both SAXUM and Lycopodium for further expansion and success across our key markets,” De Leo says.
Lycopodium provides integrated engineering, construction and asset management solutions across the resources, rail infrastructure, and industrial processes sectors in Australia, Canada, the US, Argentina, Brazil, Peru, South Africa, Namibia, Botswana, Ghana and the Philippines.
Write to Angela East at Mining.com.au
Images: Lycopodium
