NRW Acquires Fredon for $200M, Adding $840M Revenue and New EMIT Pillar

Strategic Expansion Through Acquisition

NRW Holdings Limited has announced a conditional agreement to acquire 100% of Fredon Industries Pty Ltd, a well-established Australian multi-service provider specialising in electrical, mechanical (HVAC), infrastructure, technology, and maintenance services. Valued at up to AUD 200 million, this acquisition marks a significant milestone in NRW’s growth strategy, introducing a new fourth pillar, EMIT, that complements its existing service offerings.

Fredon, founded in 1968 and employing approximately 2,500 staff, has demonstrated consistent revenue growth and strong cash flow generation supported by a capital-light operating model. The company’s FY25 results show revenue of AUD 840 million and normalised EBIT of AUD 38.6 million, with a robust forward order book providing clear earnings visibility into FY26.

Enhancing Capabilities and Market Reach

The acquisition strategically positions NRW to tap into emerging opportunities driven by energy transition, electrification, automation, and digital innovation. Fredon’s expertise spans four core divisions, Electrical, Mechanical (HVAC), Infrastructure, and Technology, enabling NRW to diversify its service portfolio and enter new addressable markets. This expansion is expected to generate more annuity-style revenues through maintenance services, enhancing the stability and scalability of NRW’s earnings profile.

Fredon’s broad footprint across Australia, including the East Coast and growing presence in South Australia, Western Australia, and New Zealand, further strengthens NRW’s national infrastructure capabilities. The existing Fredon management team, led by CEO Scott Olsen, will remain in place, ensuring continuity and leveraging their extensive experience with major infrastructure and building projects.

Financial Structure and Outlook

The acquisition consideration will be funded from NRW’s existing revolving credit facility, with an initial cash payment of AUD 122 million on completion, supplemented by an earn-out component of AUD 45 million to AUD 60 million contingent on FY25 performance, and deferred cash payments up to AUD 18 million. Post-acquisition, NRW’s net debt is expected to rise to approximately AUD 350 million, with pro-forma gearing around 49%, anticipated to return to target levels over the medium term through strong cash flow generation.

NRW expects the acquisition to complete on or before September 30, 2025, after which it will update its group guidance. The combined entity will benefit from a substantial pipeline of projects, with NRW’s total group pipeline standing at AUD 20.9 billion and work in hand of AUD 7.1 billion, including approximately AUD 3.8 billion secured for FY26.

Market Implications and Strategic Fit

This acquisition aligns with broader industry trends emphasizing sustainability, energy efficiency, and digital infrastructure. Fredon’s capabilities in delivering complex electrical and mechanical services for sectors such as data centres, health, defence, and infrastructure complement NRW’s existing civil, mining, and mechanical-electrical-technical operations. The deal enhances NRW’s ability to offer end-to-end solutions from project conception through to maintenance, positioning the group to capture growth driven by government and private sector investment in infrastructure and green building initiatives.

While the acquisition accounting impacts are yet to be definitively assessed, and shareholder approval will be sought for financial assistance provisions, the strategic rationale is clear – NRW is expanding its service offering, diversifying revenue streams, and strengthening its market position in a capital-light, cash-generative segment.