Babylon Pump & Power has completed two key acquisitions, expanding its water services platform and enhancing earnings with minimal integration risk. These moves position the company for sustained growth in the mining services sector.
- Acquisitions of Matrix Hydro Services and Blue Hire finalized on 1 August 2025
- Deals executed at attractive multiples with immediate EBITDA uplift
- Expanded geographic footprint across Western Australia and Northern Territory
- Integration underway with operational synergies already emerging
- Focus on recurring revenue growth and disciplined capital management
Transforming Babylon’s Market Position
Babylon Pump & Power Limited (ASX – BPP) has marked a significant milestone with the completion of its acquisitions of Matrix Hydro Services and Blue Hire, two complementary businesses that deepen its capabilities in water and equipment rental services for the mining sector. Finalized on 1 August 2025, these acquisitions are not just expansions but strategic moves that integrate early-stage water lifecycle services with established rental operations.
Matrix Hydro Services brings a specialized focus on aquifer testing and groundwater solutions, offering Babylon a crucial foothold at the earliest phases of mining projects. This early engagement is a strategic advantage, allowing Babylon to build relationships before larger dewatering and water management contracts come into play. The synergy between Matrix’s diagnostic services and Babylon’s broader rental platform is already evident, with joint projects underway across Western Australia and the Northern Territory.
Expanding Reach and Revenue Streams
Blue Hire complements this expansion by enhancing Babylon’s dry hire rental footprint, particularly in pumps, generators, and hydrotesting services. Based in Bunbury, Blue Hire extends Babylon’s geographic reach and introduces new long-term clients with minimal overlap, enabling cross-hiring and fleet flexibility. The acquisition also adds a high-margin revenue stream, improving Babylon’s earnings base and offering opportunities to cross-sell services across the combined customer base.
Both acquisitions were secured at multiples around 2.5 to 3.8 times EBITDA, which are competitive within the industry and reflect disciplined capital management. The structure includes upfront cash and shares, with earn-out provisions tied to FY26 EBITDA performance, underscoring confidence in the ongoing profitability of these businesses.
Looking Ahead – Growth and Integration
Babylon’s leadership is optimistic about the future, emphasizing the low-risk nature of integration and the immediate value these acquisitions bring. With enhanced fleet scale, diversified revenue streams, and stronger recurring client relationships, the group is well positioned for sustained earnings growth and improved cash flow conversion in FY26 and beyond. CEO Michael Shelby highlighted the company’s ambition to become a significant player in the equipment rental space, leveraging the combined platform to pursue further contract wins in the mining sector.
As Babylon consolidates these new operations, investors will be watching closely to see how the promised synergies and earnings accretion materialize in the coming months. The company’s focus on disciplined integration and debt reduction suggests a prudent approach to growth, balancing expansion with financial stability.
Bottom Line?
Babylon’s acquisitions set the stage for a stronger, more integrated mining services platform, but execution in FY26 will be key to unlocking full value.
Questions in the middle?
- Will Babylon meet the earn-out targets tied to FY26 EBITDA for both acquisitions?
- How quickly will operational synergies translate into improved margins and cash flow?
- What further acquisition opportunities might Babylon pursue to consolidate its market position?