Ruralco Holdings (RHL) has entered into a share sale deed to acquire Total Eden Holdings from Anchorage Capital Partners for a purchase price of $57.4 million.
In a statement to the Australian Securities Exchange, Ruralco said water had been a strategic focus of the group's and the acquisition provided a platform for future growth in the sector.
"It is clear that water scarcity and security will be key issues over the coming years and efficient infrastructure and management of this resource will be key to our customers' prosperity.” Ruralco managing director, John Maher said.
“The investment in Total Eden is an important step in helping to mitigate the seasonal risks of Ruralco’s operations.”
Total Eden is a leading retailer of sustainable water solutions and also has specialised capabilities in the fields of design, construction and operation of end to end water systems.
"Water has always been front of mind in rural Australia and this acquisition has bolstered Ruralco’s ability to meet the needs of our customers nationally," Mr Maher said.
Ruralco said it would fund the acquisition through a raising that was flagged earlier today when the group's shares were placed in a trading halt.
Ruralco announced an accelerated non-renounceable pro-rata entitlement offer to raise approximately $43.8m.
The 1:4.3 entitlement offer at an offer price of $3 per new share is fully underwritten by UBS AG, Australia Branch (Underwriter).
The balance of the purchase price for the acquisition will be funded through an increase in existing debt facilities, Ruralco said.
Based on the purchase price and transaction funding structure, the acquisition of Total Eden is earnings per share (EPS) accretive to Ruralco on a pro forma fiscal 2013 basis, excluding synergies.