Environmental Group expands industrial boiler capability with $5.5 million acquisition

The Environmental Group announced on Sunday it has signed a binding agreement to acquire Advanced Boilers & Combustion for $5.5 million, expanding its industrial boiler service and manufacturing capabilities.

The acquisition will be funded from existing cash resources and is expected to be completed by 5 April 2025, according to a statement released to the ASX.

Advanced Boilers & Combustion, established in 2006 by Laurie Grigg and David Seymour, specialises in manufacturing and servicing industrial boilers and water heaters, with a focus on larger industrial clients. The company reported revenue of $16 million and normalised EBITDA of $1.6 million in FY24.

A significant portion of Advanced’s business comes from recurring service revenue, which represented approximately 60 per cent of its total revenue last financial year, aligning with EGL’s strategic growth plans.

The acquisition gives Environmental Group exclusive rights to Maxitherm boiler technology in Australia, which Advanced acquired in 2014. Maxitherm is recognised as one of the top two leading water tube boilers in the Australian market.

“This acquisition represents a major expansion in EGL’s sales and service offering to the industrial boiler industry, complementing EGL Energy’s existing business,” the company stated.

Advanced operates primarily in Victoria, with additional operations in New South Wales and Queensland. Its client base spans food and beverage industries, paper manufacturing, hospitals and meat processing.

Following the acquisition, Environmental Group will maintain a strong balance sheet and has secured a temporary $3 million increase in its Westpac overdraft facility until 30 September 2025, along with a permanent $1.5 million increase in its Westpac bond facility.

The vendors will continue in key roles following the acquisition’s completion.

Picture: credit Advanced Boilers & Combustion