Duratec’s EIG Deal Hinges on Tough $4.4M EBITDA Target by 2027
Duratec Limited has acquired EIG Australia for up to $9 million, significantly boosting its fuel infrastructure and electrical services capabilities across key Australian sectors including Defence and Mining.
- Duratec acquires 100% of EIG Australia for up to $9 million
- EIG specialises in fuel and fluid transfer infrastructure with strong Defence and Mining sector ties
- Acquisition enhances Duratec’s self-perform capabilities and national service offerings
- Retention of EIG’s senior management secured for at least two years
- Earn-out contingent on combined FY26 and FY27 EBITDA targets of $4.4 million
Strategic Acquisition Strengthens Duratec’s Market Position
Duratec Limited (ASX – DUR), a prominent Australian engineering and remediation contractor, has taken a decisive step to broaden its footprint in fuel infrastructure and electrical services by acquiring 100% of EIG Australia. The deal, valued at a maximum of $9 million, marks a significant expansion of Duratec’s capabilities, particularly in sectors critical to national infrastructure such as Defence, Mining & Industrial, and Energy.
Founded in 2010 and based in Canning Vale, Western Australia, EIG Australia brings specialised expertise in fuels and fluid transfer services, complemented by in-house consultancy and design capabilities. Its portfolio includes high-profile projects like aviation fuel farms and bulk fuel facilities, servicing blue-chip clients across government, mining, and industrial sectors. This acquisition not only consolidates Duratec’s position as a fuel infrastructure specialist but also enhances its ability to deliver integrated, self-perform solutions nationwide.
Financial Structure and Management Continuity
The transaction is structured with an upfront cash payment of $4.55 million, the issuance of $650,000 worth of Duratec shares escrowed for one year, and a performance-based earn-out of up to $3.8 million payable in 2027. This earn-out hinges on achieving a combined EBITDA of $4.4 million across FY26 and FY27, reflecting confidence in EIG’s growth trajectory. Importantly, Duratec has secured the retention of EIG’s senior management team, including Managing Director Daniel Johnson and Commercial Operations Manager Aldo Merlo, ensuring operational continuity and leveraging their sector expertise.
Growth Opportunities Across Key Sectors
Duratec’s Managing Director Chris Oates highlighted the strategic rationale behind the acquisition, pointing to the opportunity to scale specialist expertise and strengthen the company’s self-perform model. In Defence, the combined entity is well positioned to support the national Defence Fuel Transformation Program, delivering critical fuel infrastructure upgrades aligned with the 2024 National Defence Strategy. The Mining & Industrial sector stands to benefit from agile, scalable fuel solutions that reduce downtime in remote operations, with Duratec leveraging existing relationships with major players like Rio Tinto, BHP, and Fortescue.
Beyond these sectors, the acquisition opens doors to the Energy market, where EIG’s compliance-driven solutions can address brownfield upgrades and energy transition projects. Additionally, emerging opportunities in the Marine sector align with evolving fuel standards and environmental regulations, positioning EIG to offer comprehensive fuel system solutions for ports and maritime operations.
Looking Ahead
Funded from Duratec’s existing cash reserves, this acquisition underscores the company’s commitment to strategic growth through targeted investments. The integration of EIG is expected to unlock synergies, enhance technical capabilities, and drive margin expansion. As Duratec expands its national delivery footprint and service offerings, investors will be watching closely to see how the combined entity performs against its ambitious EBITDA targets and capitalises on emerging infrastructure opportunities.
Bottom Line?
Duratec’s acquisition of EIG sets the stage for accelerated growth in fuel infrastructure, but future earnings will hinge on meeting ambitious performance targets.
Questions in the middle?
- Will Duratec meet the combined FY26 and FY27 EBITDA hurdle to secure the full earn-out?
- How quickly can Duratec scale EIG’s innovative solutions across new sectors like Energy and Marine?
- What impact will this acquisition have on Duratec’s competitive positioning in the Defence fuel infrastructure market?
