BPP webinar update – 10 key takeaways, page-4

Who are Babylon Pump & Power’s main rivals?

The question was put to directors at Tuesday’s Investor Webinar.

Answer:

1. NPE/National Pump & Energy

2. Uon

The three groups battle for business in the mining, water and infrastructure spaces nationally.

BPP is the smaller of the three. According to managing director, Michael Shelby, its size delivers a benefit – nimbleness.

But there may be another benefit. If US-controlled NPE or the Macquarie Bank-backed Uon want to change their status from being private entities to being listed, they may see BPP as a takeover target.

And that might suit key BPP shareholders Geoff Lord and James Cullen.

Indeed, BPP chairman Jamie Cullen noted at the webinar that he’d been able to buy Resource Equipment Ltd and sell it for a five-fold gain of $100m in five years.

Cullen and Shelby - who met when they both worked for REL - want BPP to emulate REL.

Are thinking about emulating REL’s business model? Or are they preparing BPP for sale?

REL was acquired by US-based NPS/National Pump Services back in 2015.

After the REL takeover, National Pump Services changed its name to National Pump & Energy.

Now, BPP has flagged plans to buy operators in the plant rental and water management sectors and is having discussions, some of which have been taking place over some years.

Indeed, the group is allocating $2.4m for buy-outs.

But right now, it doesn’t have the money - nor the ambition - to move on NPE or on Uon.

No, it’s much more likely that NPE and/or Uon are eyeing BPP…and its bogglingly low market cap of $6.6m.