Acrow Accelerates NSW Growth with $23M Acquisitions Amid Contract Delays
Acrow Limited has acquired Brand Australia and Above Scaffolding, significantly boosting its Industrial Access division in New South Wales. Despite short-term contract delays impacting FY25, the company remains optimistic about future growth and synergy opportunities.
- Acquisitions of Brand Australia and Above Scaffolding for $23 million upfront plus earn-out
- Expected FY26 contribution: ~$40 million revenue and $7 million EBITDA pre-synergies
- Funded through expanded Westpac debt facility, immediately EPS accretive
- FY25 guidance revised down due to contract start delays, but pipeline remains strong
- Strategic expansion strengthens Acrow’s presence in NSW and complements existing operations
Strategic Acquisitions Bolster Industrial Access Division
Acrow Limited (ASX: ACF) has taken a decisive step to deepen its industrial access capabilities and geographic reach in New South Wales with the acquisitions of Brand Australia and Above Scaffolding. The combined upfront consideration totals $23 million, with an additional earn-out of up to $6 million linked to Above Scaffolding’s future performance. These moves align closely with Acrow’s disciplined acquisition strategy, targeting businesses that are immediately earnings accretive and trade at attractive valuation multiples.
Both Brand Australia and Above Scaffolding bring established blue-chip customer bases and complementary service offerings. Brand Australia, a subsidiary of global industrial services giant BrandSafway, is well entrenched in the Hunter Valley’s power generation and resources sectors, while Above Scaffolding is renowned for delivering complex engineered access solutions across Sydney, including landmark infrastructure such as the Sydney Harbour Bridge and Garden Island.
Financial Impact and Funding
Acrow expects the acquisitions to contribute approximately $40 million in revenue and at least $7 million in normalized EBITDA (pre-AASB 16 and before synergies) in FY26. The implied EV/EBITDA multiple is below 4x, underscoring the value-accretive nature of the deals. Funding will be sourced entirely from Acrow’s recently expanded Westpac debt facility, avoiding equity dilution and preserving balance sheet flexibility.
CEO Steven Boland highlighted the strategic fit, noting the potential for significant cost synergies and enhanced equipment and labour utilisation. The acquisitions are expected to be economically effective from 1 May 2025, immediately contributing to earnings per share on both an underlying and pro-forma basis.
Guidance Update Reflects Market Realities
While the acquisitions signal growth, Acrow has simultaneously revised its FY25 guidance downward amid ongoing delays in contract commencements across public and private sectors nationwide. The company estimates a $9 million EBITDA impact due to postponed work, despite a 35% increase in secured hire contracts year-to-date. Sales guidance now ranges between $260 million and $270 million, with EBITDA forecast at $80 million to $83 million.
Despite these short-term headwinds, Acrow remains confident in the medium to long-term outlook, particularly in Queensland, where infrastructure activity tied to the Brisbane 2032 Olympics is expected to accelerate. The company’s robust pipeline and strategic positioning in key industrial hubs underpin this optimism.
Looking Ahead
Acrow’s latest acquisitions and guidance update paint a picture of a company navigating near-term challenges while laying the groundwork for sustained growth. The integration of Brand Australia and Above Scaffolding not only expands Acrow’s service portfolio but also strengthens its competitive position in New South Wales, a critical market for industrial access services.
Investors will be watching closely how quickly Acrow can realise anticipated synergies and convert its strong pipeline into revenue, especially as economic uncertainties continue to affect project timelines. The company’s ability to leverage its expanded capabilities and geographic footprint will be key to unlocking value in the coming years.
Bottom Line?
Acrow’s strategic acquisitions set the stage for growth, but contract delays temper near-term earnings momentum.
Questions in the middle?
- How quickly will Acrow realise cost and revenue synergies from the new acquisitions?
- What is the likelihood and timing of earn-out payments linked to Above Scaffolding’s performance?
- How will ongoing economic uncertainties impact the start dates of key infrastructure projects?
