Acquisition Risks Loom as IMG Bets on KOBE to Boost Queensland Presence
Intelligent Monitoring Group Limited (IMG) has agreed to acquire KOBE Pty Ltd for an initial $6.98 million, aiming to expand its commercial security footprint in Queensland and boost FY25 EBITDA by approximately $2.5 million.
- IMG to acquire KOBE Pty Ltd for $6.98 million upfront plus $1.92 million earn-out
- Acquisition expected to be immediately EPS accretive with FY25 proforma EBITDA of ~$2.5 million
- Strategic expansion of IMG’s Queensland operations via ADT Security Group subsidiary
- Deal funded from November 2024 capital raising proceeds
- Completion targeted within Q1 2025, subject to customary conditions
Strategic Acquisition to Strengthen Regional Presence
Intelligent Monitoring Group Limited (ASX: IMB) has taken a decisive step to bolster its commercial security operations by entering into a binding agreement to acquire KOBE Pty Ltd. The deal, structured through IMG’s subsidiary ADT Security Group Pty Ltd, involves an initial cash payment of $6.98 million, with a deferred earn-out tranche estimated at $1.92 million, contingent on KOBE’s EBITDA performance for the financial year ending June 2026.
KOBE, established in 1999, is a well-regarded supplier of advanced security systems primarily serving government, mining, industrial, retail, and commercial sectors in Queensland. This acquisition represents a strategic expansion of IMG’s footprint in a key Australian state, complementing its existing national platform and reinforcing its position in the commercial and enterprise security markets.
Financial Impact and Growth Prospects
The acquisition is expected to be immediately accretive to earnings per share, with a proforma EBITDA contribution of approximately $2.5 million for FY25. This translates to an attractive EV/EBITDA multiple of 3.5x, signaling a value-accretive transaction for IMG shareholders. The deal is funded from the capital raised in November 2024, when IMG announced its intention to pursue strategic acquisitions to accelerate growth.
IMG’s Managing Director, Dennison Hambling, highlighted the acquisition as a continuation of the company’s strategy to build a comprehensive network of security technicians across Australia and New Zealand. He noted that ADT’s commercial business has grown organically from $2 million to a $12 million run rate within 11 months of IMG’s ownership, and with recent acquisitions, ADT’s Australian commercial revenue is on track to exceed $55 million annually by the end of 2024.
Positioning for Scale and Market Leadership
The addition of KOBE’s quality customer base and skilled workforce is expected to further unlock ADT’s commercial potential as it aims to return to historical revenue levels of $125 million and beyond. IMG is guiding for adjusted EBITDA of at least $38 million for FY25, excluding contributions from recent acquisitions, underscoring the company’s confidence in its growth trajectory.
Completion of the acquisition is targeted for the current quarter, subject to customary conditions. IMG will provide further details in an investor presentation and a Q&A session hosted by Mr. Hambling, offering transparency and engagement with stakeholders on the strategic rationale and expected benefits of the deal.
As IMG continues to consolidate its position in the competitive commercial security sector, this acquisition marks a significant milestone in its ambition to deliver scale, operational efficiency, and enhanced shareholder value.
Bottom Line?
IMG’s acquisition of KOBE signals a clear push to dominate Queensland’s commercial security market and accelerate earnings growth.
Questions in the middle?
- What specific conditions must be met for the acquisition’s completion this quarter?
- How will IMG integrate KOBE’s operations and workforce to maximise synergies?
- What are the risks if KOBE’s EBITDA underperforms relative to earn-out expectations?
