Babylon Eyes $54M Revenue Boost with Blue Hire and Matrix Acquisitions
Babylon Pump & Power is set to acquire Blue Hire, expanding its rental fleet and market reach in Western Australia, while extending its retail entitlement offer deadline to June 13.
- Acquisition of 100% of Blue Hire, a specialist pump hire and hydrotesting provider
- Pro forma FY24 revenue projected at $54 million with $14 million EBITDA including Blue Hire and Matrix
- Blue Hire founder Byron Ynema joins Babylon leadership to manage combined rental fleet
- Acquisition funded by a new NAB debt facility supporting Babylon’s growth strategy
- Retail Entitlement Offer extended to 13 June 2025 to accommodate shareholders
Strategic Acquisition Strengthens Market Position
Babylon Pump & Power Limited (ASX, BPP) has announced a significant step in its growth trajectory with the acquisition of Blue Hire, a Western Australian specialist in pump hire and hydrotesting solutions. This move consolidates a competitor and broadens Babylon’s rental platform, positioning the company as a scaled specialist provider in the high-margin equipment rental and water services sector.
Blue Hire, based in Bunbury, brings over a decade of operational expertise and a complementary rental fleet of more than 140 units, including pumps, generators, and water management equipment. The acquisition is expected to enhance Babylon’s geographic reach and deepen its service offerings across mining, industrial, marine, and agricultural sectors in regional Western Australia.
Financial Upside and Leadership Continuity
On a pro forma basis, incorporating both Blue Hire and the recently announced Matrix Hydro Services acquisition, Babylon anticipates FY24 group revenue of approximately $54 million and EBITDA around $14 million. The deal is structured with an upfront consideration reflecting an attractive 2.5x EBITDA multiple on Blue Hire’s FY24 earnings, supplemented by deferred performance-based payments.
Importantly, Blue Hire’s founder, Byron Ynema, will join Babylon’s leadership team to oversee the integration and management of the combined rental fleet. This continuity is expected to facilitate a smooth transition and leverage operational synergies, particularly given the non-overlapping client bases of the two businesses.
Funding and Shareholder Engagement
The acquisition will be funded through a new debt facility arranged with National Australia Bank (NAB), providing up to $21.2 million to cover the purchase and refinance existing debt. The facility includes standard covenants and security arrangements typical for this type of financing, underscoring the bank’s confidence in Babylon’s growth strategy.
To support the acquisition and ongoing expansion, Babylon has extended its Retail Entitlement Offer closing date to 5pm AWST on Friday, 13 June 2025. This extension offers shareholders additional time to participate in the company’s growth story as it scales its rental fleet and market presence.
Looking Ahead
Babylon targets completion of both the Blue Hire and Matrix acquisitions by 30 June 2025, marking a new chapter in its evolution as a specialty water services provider to Australia’s resource sector. An investor webinar scheduled for 5 June will provide further insights into the expanded platform and strategic outlook.
With a strengthened leadership team, enhanced rental capabilities, and solid financial backing, Babylon is poised to capitalize on growing demand for specialized pumping and water management services in resource-intensive industries.
Bottom Line?
Babylon’s acquisition of Blue Hire marks a pivotal expansion, but integration execution and market response will be key to sustaining momentum.
Questions in the middle?
- How will Babylon integrate Blue Hire’s operations and culture to maximise synergies?
- What are the specific performance targets tied to the deferred consideration payments?
- How will the extended Retail Entitlement Offer impact shareholder composition and capital structure?
