Jefferies’ industrial bankers have kicked off an investor hunt for the National Group, one of the country’s biggest mining equipment hire businesses after ASX-listed Emeco.Street Talk understands Jefferies has mailed out a six-page flyer to a handful of bidders, asking them to prepare for non-binding indicative bids in May. The data room is set to open by early April.
Based on the Gold Coast, National Group rents out 345 vehicles under dry hire or wet hire arrangements. The stock is newer than industry peers and had a 94 per cent utilisation rate at June 30, 2023, according to the flyer. And nearly 84 per cent of the revenue came from major miners. And is running the sale process alongside bankers from Jefferies’ Singapore office, which has head of Asian industrials, David Biller, and head of Indonesian coverage, Rizal Gozali, running point.Despite recording $157 million at the EBITDA line, bidders are expected to dig deeper into National Group’s client contracts. Sources said National is typically called in on shorter-term contracts at the mine site, instead of being staffed on multi-year gigs.
Suitors are also expected to ask how the concurrent $250 million refinancing is tracking, and why National still has credit funds – and expensive debt – in its capital structure instead of the big four banks. And there would also be comparisons to Emeco’s 1.06-times leverage ratio and 11.4-times interest cover ratio.