Livewire article on ZEN, page-40

Interesting
So is this story about competitor PEA and the price they paid in March for Contract Power and the value of Contract Power in terms of contracts and profit .

PEA is still the same  share price months later with a market cap of $231 million.....
And a forum of not entirely happy shareholders ....
No wonder @WangChung and friend took profits .
I wonder why the other fund has moved in and what’s in store here for Zenith apart from. Imminent release of a lot of shares from escrow


https://thewest.com.au/business/min...0m-bolstering-lithium-footprint-ng-b88783750z
Pacific Energy to buy Contract Power for $90m, bolstering lithium footprint
Peter WilliamsThe West Australian
Friday, 23 March 2018 10:01AM

Pacific Energy has struck a $90 million deal to buy fellow remote power generator Contract Power Group, giving it a big footprint in the growing lithium sector.

The acquisition will be made in $85 million cash and $5 million in Pacific Energy shares. The buyer will fund the deal through debt and a $20 million capital raising.

Contract Power founder and owner Leon Hodges will continue to manage the business for two years.

The deal will add Contract Power’s 82 megawatts of installed power generation to Pacific Energy’s output, taking it to 245MW of contracted capacity across 16 sites.

Contract Power’s clients include hard-rock lithium miners Pilbara Minerals, Horizon Power, Galaxy Resources and the Tawana Resources/Alliance Mineral Assets joint venture.

Pacifc Energy managing director James Cullen said Contract Power had estimated earnings before interest, tax, depreciation and amortisation of $14 million to $16 million in fiscal 2019, expected to increase to $17 million to $19 million the following year.

Pacific Energy through subsidiary Kalgoorlie Power Systems is WA’s leading supplier to the gold sector.

“The transaction with Contract Power gives Pacific Energy significantly more scale and reach, now with over 30 long-term power generation contracts for remote mines and townships and a weighted average remaining contract duration rising above four years,” Mr Cullen said.

“This provides us with stronger and longer earnings visibility,” he said.

Mr Hodges said: “During the due diligence process it became very clear that the high standards, quality and culture of the KPS and Contract Power businesses were remarkably similar.

The cash component of the acquisition will be funded through a new $140 million debt facility provided by ANZ and National Australia Bank.

Following settlement, Pacific Energy will undertake a one for 9 rights issue at 50¢ a share to raise about $20 million. The offer is not underwritten.

The company’s 50 per cent shareholder, Ken Hall, would take up his entitlement in full.

Dividends will be suspended for a year.

Pacific Energy’s shares were unchanged at 54¢ at 9.52am.