Verbrec Accelerates Digital Transformation with $5.5M Alliance Automation Buy
Verbrec Limited has agreed to acquire Alliance Automation for $5.5 million, significantly expanding its automation and digital capabilities while adding over $60 million in annual revenue.
- Acquisition of Alliance Automation for $5.5 million cash
- Adds $62 million revenue and 275 staff to Verbrec’s operations
- Expands capabilities in automation, machine learning, and cybersecurity
- Combined workforce grows to approximately 700 across 18 locations
- Transaction funded by cash reserves and debt, no equity issuance
Strategic Expansion in Automation and Digital Services
Verbrec Limited (ASX, VBC) has taken a decisive step to broaden its footprint in the automation and digital transformation sector by signing a share purchase agreement to acquire Alliance Automation Pty Ltd and its subsidiary from Telstra Limited for $5.5 million in cash. This acquisition marks a significant expansion of Verbrec’s service offering, particularly in automation, control systems, machine learning, and cybersecurity.
Founded in 2010, Alliance Automation is a well-established player in Australia’s industrial automation landscape, boasting a strong Tier 1 client base across mining, energy, infrastructure, manufacturing, and water sectors. With over 275 engineers and professionals spread across 11 offices, Alliance Automation generated $62 million in revenue for FY2025, complementing Verbrec’s existing $85.6 million revenue base.
Financial and Operational Synergies
On a pro-forma basis, the combined entity will command approximately $148 million in annual revenue and employ around 700 staff across 18 locations in Australia and New Zealand. The deal is structured with a purchase price representing a five times multiple of Alliance Automation’s FY2025 EBITDA, reflecting a disciplined valuation approach.
Verbrec’s management has demonstrated a strong track record of operational improvement, having lifted EBITDA margins from a negative 0.6% in FY2023 to 9.2% in FY2025. Both management teams are optimistic about further margin enhancement opportunities post-integration, leveraging shared clients and complementary capabilities.
Funding and Future Outlook
The acquisition will be funded through a combination of cash reserves and debt facilities, including a newly negotiated $6 million bank bill loan and increased bank guarantee and equipment finance facilities. Notably, Verbrec will not issue new equity to finance the transaction, preserving shareholder value.
Both CEOs expressed enthusiasm about the strategic fit and growth potential. Verbrec’s Mark Read highlighted the enhanced ability to meet clients’ evolving digital needs, while Alliance Automation’s Chris Cooney emphasized the opportunity to deliver smarter, more connected solutions and expand career pathways for employees.
Completion is expected within the calendar year, subject to customary conditions including third-party consents and employee arrangements. The transaction positions Verbrec as a more formidable player in the Industry 4.0 space, with a reinforced reputation as a partner for sustainable industrial solutions.
Bottom Line?
This acquisition sets the stage for Verbrec’s accelerated growth in digital industrial services, but integration execution will be key to realising promised synergies.
Questions in the middle?
- How quickly can Verbrec integrate Alliance Automation’s operations and culture?
- What specific margin improvements are realistically achievable post-merger?
- Will Verbrec pursue further acquisitions to consolidate its Industry 4.0 positioning?
