Saunders to Acquire Aqua Metro, Adding $135M Revenue Potential in FY2026
Saunders International has agreed to acquire Aqua Metro for up to $30 million, marking a strategic push into water infrastructure with strong financial prospects and a robust project pipeline.
- Acquisition of Aqua Metro for up to $30 million
- Aqua Metro’s FY2025 revenue forecast of $102 million and EBITDA of $8.2 million
- Strong order book of $411 million and pipeline exceeding $1.4 billion
- Funding via $5 million placement, $8 million debt facility, and cash reserves
- Transaction expected to be EPS accretive in FY2026
Strategic Acquisition to Boost Water Infrastructure Presence
Saunders International Limited (ASX – SND) has announced a significant acquisition, entering into a Share Sale Agreement to purchase 100% of Aqua Metro Pty Ltd for up to $30 million. This move represents a deliberate expansion into the water infrastructure sector, a market where Saunders aims to deepen its footprint and diversify its service offerings.
Aqua Metro, based in Victoria, is a well-established provider of integrated water infrastructure services, boasting a strong annuity-style revenue model supported by long-term contracts with utilities and government agencies. The company’s forecast revenue for FY2025 stands at $102 million with an EBITDA of $8.2 million, expected to grow to $135 million and $11 million respectively in FY2026.
Robust Order Book and Growth Pipeline
The acquisition brings with it a substantial order book valued at $411 million, alongside a pipeline of opportunities exceeding $1.4 billion. These figures underscore Aqua Metro’s solid market position and the potential for sustained revenue growth. The business currently holds positions on four water authority framework panels, with contracts extending through to 2028, providing a stable foundation for future earnings.
Importantly, Aqua Metro’s management and workforce of over 100 employees will remain post-acquisition, ensuring continuity and preserving the company’s operational strengths. Manish Pancholi, Aqua Metro’s CEO, will join Saunders’ leadership team, signaling a collaborative integration approach.
Funding and Financial Impact
The acquisition will be funded through a combination of a $5 million institutional placement, an $8 million drawn acquisition debt facility arranged with the Commonwealth Bank of Australia, and Saunders’ existing cash reserves. The placement involved existing substantial shareholders and will see the issuance of approximately 7.69 million new shares.
Saunders expects the transaction to be earnings per share accretive in FY2026, reflecting confidence in Aqua Metro’s growth trajectory and the synergies anticipated from combining capabilities across hydraulics, mechanical, civil, and water infrastructure disciplines.
Conditions and Next Steps
The acquisition remains subject to customary closing conditions, including consents from counterparties to Aqua Metro’s material contracts and no material adverse changes before completion. Shareholder approval will be sought later this year for part of the share issuance related to the earn-out structure, which aligns vendor incentives with ongoing performance.
Completion is expected in the first quarter of FY2026, setting the stage for Saunders to accelerate its growth in a sector with significant infrastructure demand and long-term contract visibility.
Bottom Line?
Saunders’ acquisition of Aqua Metro positions it for accelerated growth in water infrastructure, but integration execution and contract consents will be critical to unlocking full value.
Questions in the middle?
- How will Saunders manage integration risks while preserving Aqua Metro’s operational strengths?
- What are the potential impacts of the earn-out structure on Saunders’ future earnings and shareholder dilution?
- How might the acquisition influence Saunders’ competitive positioning in other infrastructure sectors?
