Babylon Divests Ausblast for $2.8M, Cuts Net Debt by $1.5M

Strategic Divestment to Simplify Operations

Specialist resources services provider Babylon Pump & Power Limited (ASX – BPP) has announced a significant strategic move, agreeing to divest its non-core industrial services business, Ausblast, for $2.8 million in cash. The sale to Sandgroper Group Holdings Pty Ltd is expected to complete on 21 January 2026, marking a clear pivot towards Babylon’s core strengths in water management and rental services.

Since acquiring Ausblast in March 2021, Babylon has operated the business as a provider of vacuum truck and high-pressure water blasting services. While Ausblast has delivered steady performance, generating approximately $1.1 million in revenue and $0.25 million EBITDA in the first half of FY26, it no longer fits within Babylon’s sharpened strategic focus.

Financial and Strategic Benefits

The transaction is expected to reduce Babylon’s net debt by around $1.5 million, with the remaining proceeds; approximately $1.3 million; earmarked for working capital and growth within the rental segment. This capital reallocation aligns with Babylon’s ambition to expand its rental fleet and water management services, areas offering stronger scalability and margin potential.

Importantly, while the divestment does not significantly reduce corporate overheads, it simplifies management complexity and lowers execution risk. This streamlining comes on the heels of Babylon’s recent acquisitions of Matrix Hydro Services and Blue Hire, reinforcing its commitment to an integrated water management and rental platform.

Market Positioning and Future Outlook

Babylon’s Managing Director, Michael Shelby, emphasised the strategic rationale behind the sale – "This transaction allows us to simplify the business, strengthen the balance sheet and redeploy capital from a low growth segment into our core rental and water management activities, where we see the strongest long‑term returns."

With operations spanning Western Australia and Queensland, Babylon’s focus on specialist mining services; particularly high-pressure pumping, dewatering, and project water management; positions it well to capitalise on growing demand in the resources sector. The divestment of Ausblast signals a disciplined approach to portfolio management, prioritising segments with higher growth and profitability prospects.

Following the sale, Babylon’s invoice finance facility with NAB will be reduced to $2.2 million, and its master equipment finance facility will decrease by about $1 million, reflecting the improved balance sheet position.