Vysarn taps into $50b pipeline of east coast water works with purchase of Melbourne’s CMP Consulting

Perth-based Vysarn will tap into what it calls a “once-in-a-generation water infrastructure boom” on Australia’s east coast with the purchase of a Victorian consulting business. Vysarn, led by former Fremantle and Collingwood AFL player James Clement, provides water service solutions to clients across the resource, construction, agriculture and utilities sectors. The company is chaired by WA businessman Peter Hutchinsion and made its return to the Australian Securities Exchange in 2019 after buying Ausdrill’s hydrogeological drilling businesses for $16 million. It’s now extending its reach into the east coast market via a $38.2 million capital raising that will be used to sweep up three private entities controlled by the founders of CMP Consulting Group — an engineering company focused on the water industry providing end-to-end infrastructure services. Mr Clement said the deal would be “transformative” for Vysarn. “This transaction delivers national scale, expertise, diversification of clients and a significant platform for Vysarn to grow, as well as exposure to a once-in-a-generation water infrastructure boom across Victoria, New South Wales and Queensland,” he said. “The combined companies are well positioned to benefit from the $50+ billion that has been earmarked for investment in water infrastructure and projects across Australia’s three most populous states over the next 10 years.” Friday’s announcement comes hot on the heels of another deal inked by Vysarn earlier this month. It told investors on September 2 that it would pay $7.5m cash for Waste Water Services. The WA-based company designs, manufactures, installs and maintains wastewater and potable treatment plants and pumping stations for a host of high-profile blue-chip clients including BHP, Rio Tinto, Fortescue, Santos and Pilbara Minerals. The deal for Melbourne-based CMP — whose primary long-term clients include the major metropolitan and regional Victorian water authorities, major contractors, government departments, and interstate councils and authorities — follows a 137.5 per cent rise in Vysarn stock price over the past year to 47.5¢ before it entered a trading halt earlier this week. Under the terms of the sale, Vysarn will pay $24m in cash and 10 million shares to CMP’s founders. It will raise the money through the issue of 95.5 million new shares priced at a discounted 40¢ a piece. The West Australian understands the placement among institutional and sophisticated investors was heavily supported, with commitments believed to have come from major superannuation funds, Regal Funds Management, Wilson Asset Management and Ausbil. A further deferred consideration of up to 30 million Vysarn shares over three years is also on the table, subject to CMP achieving earnings targets. “Both the CMP and WWS transactions meet our strict investment criteria of being earnings accretive, with aligned management and a capital light business model,” Mr Clement said. “Combined with a broadened and more diversified portfolio of high-quality clients, Vysarn is well-placed to deliver stable, long-term earnings growth for shareholders.” The CMP deal is expected to close by the end of October and grow Vysarn’s market capitalisation to $245m. Its share were flat at 10am at 47.5¢ after paring a small dip at the opening bell.