Nordic Group has announced yet another acquisition, as part of its ongoing bid to diversify its earnings base.
The company on Dec 11 announced plans to pay $5 million for Avon Industries, which is in the business of designing and building fuel dispensing systems in commercial and military airports.
The acquisition is a chance for Nordic, led by executive chairman Chang Yeh Hong, to extend its suite of operation and maintenance services to government agencies.
The deal will also help bring about synergies as Nordic's existing products and services, such as electrical and instrumentation services as well as fabrication, scaffolding and insulation services, could support Avon’s business.
Meanwhile, Nordic can also help cross-sell Avon’s products and services to its existing customers, including those in the process industry.
As at Sept 30 2022, Avon had a net tangible asset of $5.1 million.
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Acquisitions made by Nordic in recent years include Multiheight in 2011, Austin Energy in 2015, Ensure Engineering in 2017, Envipure in 2019 and Starburst and Eratech in 2022.
Separately, in its business update for the quarter ended Sept 30, Nordic reported earnings of $13.6 million for 9MFY2023 ended Sept 30, down 18% y-o-y. Revenue in the same period ended March was up 8% to $128.8 million, says the company in a business update on Dec 11.
For the three months, the company reported a net margin of 11%, down 3 percentage points y-o-y.
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In the quarter, Nordic won contracts worth $36.6 million, bringing its order book to $187.9 million as at Sept 30. The company provides a range of engineering and maintenance services to various clients.
Recurring revenue in the form of maintenance work now makes up a bigger share of the company’s turnover, versus lumpier project-based jobs.
Nordic Group’s shares last traded at 40 cents on Dec 8, down 11.11% year to date.
