Electricity woes prompt Hirequip to buy generator hire firm

1.00pm

Listed hire company Hirequip today said it had purchased specialist generator hire company Power Hire Ltd for $11.3 million in cash and shares.

Hirequip executive chairman Graeme Wong said Power Hire was a very good fit with Hirequip being the leading electricity generator hire and sales company in the New Zealand market.

Mr Wong said Hirequip saw the power hire sector as being very attractive in light of recent developments in New Zealand's electricity generation sector, including diminishing gas reserves, the abandonment of Project Aqua and fluctuating hydro storage.

"Major users and critical services all need back-up and/or standby generation capacity and Power Hire is ideally placed as the leading player selling, hiring and servicing generators in this market," Mr Wong said in a statement to the NZX.

The purchase will be by way of $5.8 million in cash with the balance through the issue of 5.79 million Hirequip shares at 95 cents each. Settlement is due on May 31.

Mr Wong said the acquisition will add $6.5 million revenue to Hirequip's equipment hire revenue stream lifting it to a total of more than $70 million on an annualised basis.

Power Hire is being purchased from the family interests of Michael Jacomb who established the business in 1975 at Upper Hutt.

The company also has branches in Auckland, Christchurch and Dunedin.

The purchase is the latest phase of Hirequip's acquisition based growth strategy.

In December last year Hirequip bought North Island hire company Ready Hire and Christchurch general hire business Hamill Hire, which increased the company's hire business revenues by over 30 per cent.

Power Hire employees had been offered jobs " on substantially the same terms and conditions that they currently have".

"I am hopeful that all employees will opt to accept employment." Mr Wong said.

- NZPA