Legend makes powerful acquisitions

Legend makes powerful acquisitions

The ASX listed distributor has splashed more than $8 million on buying MSS Fibre Group and MSS Power Systems

ASX-listed Legend Corporation has spent more than $8 million on acquisitions.

It has acquired MSS Fibre Group, which includes Melbourne-based MSS Fibre Systems and Western Australia-based MSS Power and Fibre Systems (MSF). It has also purchased MSS Power Systems (MPS).

MSF supplies fibre optic cables provided in drum quantities, related products, accessories and engineering services. MSF partners with electrical wholesale distribution channel to supply fibre data and telecommunications markets.

Legend will make an initial payment of $5.75 million with a deferred payment of $2.75 million, which will be based on earnings before tax for the financial year ending June 30 next year.

MSF will operate as a division of Legend and has forecast revenues of $7.5 million and earnings before tax of $1.5 million for the year ending June 30.

Legend CEO, Brad Dowe, said the acquisition of MSF provides access to the fibre optic market.

“Legend has a broad range of complementary resources that will enable growth and improved service delivery for MSF’s client base,” Dowe said.

The ASX-listed entity has also splashed $3.3 million on acquiring Melbourne-based specialised tooling company, MPS.

Legend will make an initial payment of $3.3 million and two deferred payments. The first deferred payment will be up to $1.1 million and subject to EBIT outcomes of the financial year ending June 30 next year.

For the year ending June 30 MSP is expected to achieve sales totalling $4.7 million and operating earnings before tax of $900,000.

“MSP represents an excellent fit with our Australian engineering lug, link and connector range, enabling us to offer an integrated system from cable strip through to cut, crimp and fasten,” Dowe, said.

MSP founder, Michael Sneath, said access to Legend’s supply, sales and distribution resources, enables it service the needs of all power utilities and related service providers.

Founders and staff of all the acquired companies are expected to remain.

The acquisitions will be funded via existing debt facilities and working capital and expects to complete the transactions this month.

In August last year, Dowe flagged it was on the acquisition trail after posting positive 2010 financial year results and reducing its net debt, wiping off $11.6 million and bringing it down to $8.1 million.

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Tags Telecommunicationslegend corporationfibreMSS Fibre Systems MSS Power and Fibre Systems (MSF)MSS Power Systems (MPS)

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