west australian article

Repcol tipped to splash $20m on resource rental play
16th April 2009, 9:00 WST




Repcol, the cashed up debt collector backed by a cross-section of Perth’s financial community elite, is poised to make a $20 million plunge into the mining services sector through the acquisition of privately owned Resource Equipment Rentals.

The West Australian understands Repcol is finalising an agreement to pick up the WA mining equipment rental group through a cash and scrip deal that will also see Patersons Securities raise about $8 million.

The move represents Repcol’s first foray beyond debt collection.

It also follows months of speculation about the company’s future direction in the wake of last year’s $4.2 million rights issue, which saw former PCG Group managing director Jamie Cullen, chemicals millionaire Gordon Martin, mining entrepreneur Craig Burton, investment banker Adam Rankine-Wilson and businessman John Bond join its register.

Mr Cullen, who was last night understood to be on an investor roadshow, has also stepped into an executive director role while Patersons executives Michael Manford and Aaron Constantine have emerged with a sizeable stake in the group.

It is understood the Resource Equipment acquisition will be structured to give the mining services group’s management a hands-on role in the new company.

In addition to its cash and scrip component, the deal price is expected to include certain conditions tied to future performance.

The Welshpool-based Resource Equipment is owned by Keith Lucas and Tony Ryder, former sales and marketing manager for Coates Hire WA, which was bought out by the Carlyle Group and Kerry Stokes’ National Hire Group.

It remains unclear whether Repcol intends to retain or sell its debt collection business, which is expected to break-even this year.

The latest deal is likely to lead to a re-rating of the $12.5 million minnow, which has operated as a debt collector for more than 30 years.

Repcol shares last traded at 1.7¢.

KATE EMERY