Mayfield’s $30M SMEC Deal Raises Questions on Integration and Earn-Out Risks
Mayfield Group Holdings has announced the acquisition of SMEC Power & Technology for up to $30 million, marking its entry into underground mining electrical infrastructure and international markets.
- Acquisition of SMEC Power & Technology for up to $30 million
- Entry into underground mining electrical infrastructure sector
- Consideration split: 70% upfront, 30% earn-out with cash and MYG shares
- SMEC services 85% of top 20 WA gold producers and exports to Africa and Asia
- Strategic synergies with Mayfield’s renewables and data centre sectors
Strategic Expansion into Underground Mining
Mayfield Group Holdings Limited (ASX: MYG) has taken a significant step to broaden its footprint in the electrical infrastructure sector with the acquisition of SMEC Power & Technology. Valued at up to $30 million, this deal not only introduces Mayfield to the underground mining market but also opens doors to international export opportunities across Africa and Asia.
SMEC, a specialist in designing and manufacturing underground electrical starter panels, switchboards, and substations, is a dominant player servicing 85% of Western Australia’s top gold producers. This acquisition aligns with Mayfield’s ambition to become Australia’s leading electrical infrastructure group, particularly as underground mining experiences structural growth driven by demand for gold and critical minerals.
Financial Structure and Funding
The purchase price is structured with 70% payable upfront and 30% subject to an earn-out based on SMEC’s FY26 financial performance. Both components are funded through a mix of cash and Mayfield shares, with the shares subject to a 24-month escrow period. Importantly, Mayfield will finance the cash portion from its robust cash reserves of $49.2 million as of December 2025, maintaining a strong balance sheet post-acquisition.
SMEC is forecast to generate $41 million in revenue and $6 million in EBITDA for FY26, translating to an acquisition multiple of approximately 5 times EBITDA. The deal is structured as an asset sale on a cash-free, debt-free basis, with normal working capital adjustments.
Operational Continuity and Synergies
Crucially, SMEC’s founder and Managing Director, Martin Law, will remain with the business under a long-term contract. This continuity is expected to preserve strong customer relationships and operational leadership, which are vital for integrating SMEC’s capabilities with Mayfield’s existing operations.
SMEC’s expertise in kiosk substations and switchboards complements Mayfield’s renewables and data centre sectors, where modular and decentralised electrical infrastructure is increasingly in demand. This acquisition enhances Mayfield’s integrated model, spanning design, manufacturing, installation, commissioning, and ongoing maintenance.
Strategic Implications and Market Positioning
Mayfield’s CEO, Andrew Rowe, highlighted the acquisition as a transformative move that strengthens the company’s position across multiple high-growth sectors. The entry into underground mining and international markets diversifies Mayfield’s revenue streams and positions it to benefit from the electrification trends within mining and energy transition sectors.
With SMEC’s established export channels and strong domestic market presence, Mayfield gains a platform for offshore growth without the capital intensity of setting up overseas operations. This acquisition follows Mayfield’s earlier purchase of BE Switchcraft in 2025, underscoring a disciplined approach to value-accretive growth.
Bottom Line?
Mayfield’s acquisition of SMEC signals a bold expansion into underground mining and international markets, setting the stage for future growth and diversification.
Questions in the middle?
- How will Mayfield integrate SMEC’s operations with its existing business units?
- What are the specific financial targets tied to the $9 million earn-out?
- How will international export markets contribute to Mayfield’s revenue mix over the next few years?
