Sime unit plans to acquire Aussie firm Onsite Rental for RM1.9bil

Sime Darby said the acquisition offers greater access to the construction, energy and mining industries growth in Australia. — Reuters

PETALING JAYA: Sime Darby Bhd’s indirect wholly-owned subsidiary, Sime Darby Allied Operations Pty Ltd, has proposed to acquire Australia-based Onsite Rental Group Ltd for A$635mil (RM1.92bil).

In a filing with Bursa Malaysia, the conglomerate said the price, which will be financed entirely through external borrowings, was agreed on a cash-free and debt-free basis.

However, it will be subjected to any price adjustments, to be determined based on completion accounts.

Upon acquisition, Sime Darby’s gearing ratio is expected to rise to about 0.45 times from 0.31 times as at June 30, 2022.

The completion of acquisition of the Australian equipment rental service provider is expected to take place in the fourth quarter of Sime Darby’s financial year ending June 30, 2023.

In a statement, Sime Darby group chief executive officer Datuk Jeffri Salim Davidson said the over-a-century-old company is strategically positioning itself to capture demand across the resources, infrastructure and energy sectors.

“The Onsite acquisition complements our existing portfolio and provides geographic expansion to position our industrial division in high growth areas of the Australian market,” he said.

Jeffri added that Sime Darby is pleased to have retained Onsite’s management team and is looking forward to working with them to build on its leadership in the mining and construction equipment rental market.

Onsite has about 500 employees through a network of about 30 branches across Australia.

Meanwhile, Onsite chief executive officer Mike Foureur said Sime Darby is a natural fit for the Australian firm.

“With this backing, Onsite can invest into adjacencies, achieve supply chain efficiencies, expand into new markets and enhance our offering to accelerate growth and contract wins,” he said.

Explaining the rationale of the acquisition, Sime Darby said it represents an opportunity for the industrial division to enter the business-to-business rental services market through an established, sizeable and reputable provider with an established platform for future growth.

“The acquisition complements the industrial division’s existing rental offering through Salmon Earthmoving and Hastings Deering by providing products across access, power, site accommodation, tooling and small-scale earth moving that strengthens our participation across the industrial equipment rental spectrum in Australasia,” it said.

Sime Darby added that the acquisition also offers itself greater access to the construction, energy and mining industries growth in Australia.

The conglomerate said this was being driven by committed government stimulus spending on infrastructure projects, new gas plant expansion projects and expanding levels of tonnage throughput across mineral commodities.

Onsite, which primarily serves the mining and construction industries, provides dry-hire solutions and industry leading “Digital Rental Management” solutions.

It has a large and diverse fleet of about 60,000 assets providing diversification to Sime Darby’s industrial rental equipment offerings across a broad range of industries in Australia.

In its financial year ended June 30, 2022, Onsite reported a net profit of A$33mil (RM99.6mil) on the back of revenue of A$302.1mil (RM911.5mil), supported by a total asset base of A$537.7mil (RM1.62bil) as at June 30, 2022.

Sime Darby’s share price was unchanged yesterday at RM2.28 apiece.