Southern Cross Electrical Engineering (ASX:SXE) Acquires Force Fire Holdings
Acquisition Details
Southern Cross Electrical Engineering Limited (ASX:SXE) has executed a Share Purchase Agreement to acquire 100% of Force Fire Holdings Pty Ltd for a total consideration of up to $53.5 million. The acquisition includes an initial upfront payment of $36.3 million, with potential additional payments based on EBIT growth targets for FY26 and FY27. The transaction is expected to be completed on 1 April 2025 and will be funded through SCEE’s existing cash reserves.
Strategic Rationale
The acquisition aligns with SCEE’s strategy to expand into adjacent and complementary capabilities within the fire safety sector, a natural extension of its core electrical competence. Force Fire’s focus on maintenance and recurring services, which already account for approximately 30% of its revenue, provides further growth opportunities. The combined entity aims to leverage cross-selling opportunities and enhance its presence in the commercial and industrial fire safety market.
Financial Impact
Force Fire is projected to generate $106 million in revenue and $8.3 million in EBIT for FY25, with EBIT expected to grow to at least $10 million in FY26. The acquisition is forecast to result in at least 18% EPS accretion on a FY25 pro forma basis. SCEE anticipates that Force Fire will contribute significantly to its financial performance from FY26 onwards.
Executive Comments
SCEE Group Managing Director Graeme Dunn stated, “I am extremely pleased to announce the acquisition of Force Fire. We welcome Michael, Bryan, Paul and their staff to our group and I believe there will be a very strong cultural alignment between our businesses which we regard as a key factor in our success. The fire sector is an obvious adjacency to what we do and will complement the three structural tailwinds – infrastructure, data centres and electrification – to which the SCEE Group is exposed.”
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