Lincoln Crowne & Company Mining & Engineering Services Market Update for the week ending 29th November 2013. Report contains updates on the M & A deals done over the previous week - amongst a wild ride for the Sector with Forge Group dropping over 80% in value following its relisting after suspension

1. WEEKLY
Australian Engineering & Mining Services
29 November 2013
WWW.LCC.ASIA
M&A Rumour and Activity
The Australian market was down over the week with the Forge situation casting a shadow. On our calculations fund
manager Vinva Investment Management lost the best part of A$30M on Forge. The Australian dollar fell for the sixth
consecutive week on expectations over US stimulus measures.
After intense political lobbying, Treasurer Joe Hockey blocked Archer Daniels Midland’s $3.4B takeover of GrainCorp.
Interestingly, Treasurer Hockey appeared to leave the door open for a future bid stating that he would likely allow ADM to
boost its investment in GrainCorp to 24.9% (just below the 25% required to defeat a special resolution) from its current 19.9%
"to encourage ADM to demonstrate its commitment to the Australian grains industry." GrainCorp shares lost 22% following
the announcement.
Four smaller deals were announced this week.
VDM Group Limited (ASX:VMG) sold consulting businesses in a management buyout. The divestment of the consulting
business is part of VDM’s strategy to concentrate on rebuilding for its future.
Fugro NV (ENXTAM:FUR) reached agreement to acquire engineering geoscience provider Advanced Geomechanics Pty
Ltd (http://www.ag.com.au) for an undisclosed amount.
Dragon Group International Limited (SGX:MT1) entered into a non-binding term sheet to acquire industrial and resources
maintenance businesses from AMMS Group Pty Ltd (http://www.amms.com.au) for between $12M to $18M.
Schramm Inc acquired drilling equipment manufacturers Airdrill Pty Ltd and Airdrill Hammers and Bits Pty Ltd
(http://www.airdrill.com.au) for an undisclosed amount.
News Headlines and Key Sector Developments
Ticker News/Event
Ticker News/Event
AAX
After completing its quarterly business reviews is undertaking a 4
for 11 fully underwritten accelerated non-renounceable entitlement
offer to raise approximately $31M. Approximately 44.9M fully paid
ordinary shares will be issued. Funds raised will be used to pay
down debt and strengthen AAX’s balance sheet
FGE
End to voluntary suspension after announcing a $127M profit
write down in FY14 associated with Diamantina Power Station
and West Angelas Power Station projects. $45M net cash
outlay required to complete both projects. ANZ has agreed to
provide further support to FGE through new facilities and
certain amendments to existing debt facilities to cover liquidity
issues as a result of the net cash outlays
ANG
Secured a four-year contract for the maintenance and repair of
dump truck bodies, buckets and ancillary mobile equipment at
Codelco’s Gabriela Mistral mining operation. The base value of
the contract is worth approximately $5M in the first three years
and $2.3M in the fourth
LEI
John Holland Group has been appointed construction
contractor for the Yeppen South roads project. It is anticipated
the value of this contract will be $112M
DCG
Awarded a $37.5M contract from the Roy Hill Iron Ore Project for
construction of diesel fuel infrastructure
MYE
Expects NPAT to be in the range of $0.4M to $0.6M for the half
year FY14 with revenue between $72M and $76M
EAL
Revenue & Earnings growth expected from investment in facilities
to service the oil & gas, renewable energy and water sectors. EAL
expects FY14 first half NPAT to exceed record of $4.1M in 2013
first half
PRG
Recorded an after‐tax profit of $12.4M for the six months to 30
September 2013, an increase of 1% over the first half of FY13
(when there was a one‐off tax benefit of $1.7M)
Source: Capital IQ, Thomson Reuters, LCC research
IMPORTANT DISCLAIMER
This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from
sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such
information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation
to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be,
nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for
any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made.
Page 1
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2. WEEKLY
Australian Engineering & Mining Services
29 November 2013
Ticker Company Name
AJL
ASL
AAX
ANG
BLY
BKN
BYL
BOL
BSA
CDD
CGH
COF
DCG
DSB
DOW
EAL
EGN
EHL
EVZ
FWD
FGE
GCS
GNG
HDX
IMD
LEI
LCM
LYL
MLD
MAH
MYE
MIN
MCE
MND
NMS
NOD
NWH
OTC
PRG
RCR
RQL
SND
SDM
SSM
SWL
SXE
STS
SWK
TPP
TSE
UGL
VMG
WDS
WOR
WTP
AJ Lucas Group Limited
Ausdrill Limited
Ausenco Limited
Austin Engineering Limited
Boart Longyear Limited
Bradken Limited
Brierty Limited
Boom Logistics Limited
BSA Limited
Cardno Limited
Calibre Group Limited
Coffey International Limited
Decmil Group Limited
DeltaSBD Limited
Downer EDI Limited
E&A Limited
Engenco Limited
Emeco Holdings Limited
EVZ Limited
Fleetwood Corporation Limited
Forge Group Limited
Global Construction Services Limited
GR Engineering Services Limited
Hughes Drilling Pty Limited
Imdex Limited
Leighton Holdings Limited
Logicamms Limited
Lycopodium Limited
MACA Limited
MacMahon Holdings Limited
Mastermyne Limited
Mineral Resources Limited
Matrix Composites & Engineering
Monadelphous Group Limited
Neptune Marine Services Limited
Nomad Building Solutions Limited
NRW Holdings Limited
OTOC Limited
Programmed Maintenance Services
RCR Tomlinson Limited
Resource Equipment Limited
Saunders International Limited
Sedgman Limited
Service Stream Limited
Seymour Whyte Limited
Southern Cross Electrical Engineering
Structural Systems Limited
Swick Mining Services Limited
Tempo Australia Limited
Transfield Services Limited
UGL Limited
VDM Group Limited
WDS Limited
WorleyParsons Limited
Watpac Limited
WWW.LCC.ASIA
Market Cap Open Price Close Price Week High Week Low
(AUD Million)
(AUD)
(AUD)
(AUD)
(AUD)
246
244
148
234
136
939
41
66
27
976
117
78
314
14
2,069
86
48
117
11
174
65
89
78
65
128
5,483
110
168
427
150
57
2,029
61
1,523
65
16
329
19
357
406
35
64
123
61
94
150
30
70
6
581
1,053
11
130
4,035
172
0.87
0.89
1.20
3.38
0.34
5.93
0.38
0.18
0.13
6.96
0.42
0.30
2.09
0.36
5.13
0.73
0.16
0.22
0.06
3.10
4.18
0.54
0.61
0.34
0.63
16.51
1.49
4.52
2.42
0.13
0.84
11.38
0.66
17.50
0.05
0.06
1.23
0.11
3.00
3.27
0.15
0.90
0.63
0.22
1.17
0.96
0.44
0.34
0.04
1.22
6.86
0.01
0.90
16.40
0.96
0.92
0.78
1.20
3.20
0.30
5.55
0.37
0.14
0.12
6.76
0.37
0.31
1.86
0.29
4.76
0.70
0.16
0.20
0.05
2.87
0.75
0.53
0.52
0.31
0.61
16.26
1.58
4.30
2.44
0.12
0.75
10.90
0.64
16.50
0.04
0.06
1.18
0.10
3.02
2.98
0.14
0.82
0.55
0.22
1.21
0.93
0.47
0.33
0.04
1.14
6.45
0.01
0.90
16.35
0.94
0.92
0.90
1.20
3.43
0.35
6.04
0.40
0.18
0.13
7.01
0.43
0.31
2.15
0.38
5.14
0.73
0.16
0.22
0.06
3.12
4.18
0.55
0.61
0.34
0.67
16.71
1.58
4.52
2.46
0.13
0.86
11.45
0.69
17.79
0.05
0.06
1.26
0.11
3.07
3.38
0.16
0.90
0.66
0.23
1.21
0.96
0.47
0.34
0.04
1.34
6.93
0.01
0.91
16.47
0.97
0.86
0.77
1.20
3.14
0.29
5.52
0.35
0.14
0.12
6.68
0.36
0.28
1.84
0.28
4.76
0.64
0.16
0.18
0.05
2.76
4.18
0.53
0.52
0.28
0.54
16.08
1.49
4.30
2.34
0.11
0.70
10.88
0.64
16.46
0.04
0.06
1.14
0.10
2.95
2.80
0.13
0.79
0.55
0.21
1.14
0.90
0.44
0.32
0.04
1.11
6.41
0.01
0.84
15.84
0.89
Weekly Volume
% Change
▲
▼
—
▼
▼
▼
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▼
▼
▲
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▼
▼
▼
▼
▼
▼
▼
▼
▼
▼
▼
▼
▲
▼
▲
▼
▼
▼
▼
▼
▼
▼
▼
▼
▲
▼
▼
▼
▼
—
▲
▼
▲
▼
▲
▼
▼
—
▼
▼
▼
5.7%
-11.9%
0.0%
-5.3%
-11.8%
-6.4%
-2.6%
-22.2%
-7.7%
-2.9%
-11.9%
1.7%
-11.0%
-20.8%
-7.2%
-4.1%
-3.1%
-7.0%
-14.8%
-7.4%
-82.1%
-2.8%
-14.0%
-7.5%
-3.2%
-1.5%
6.0%
-4.9%
0.8%
-4.0%
-10.7%
-4.2%
-3.0%
-5.7%
-23.9%
-1.7%
-4.1%
-4.8%
0.7%
-8.9%
-6.7%
-8.9%
-12.7%
0.0%
3.4%
-2.6%
6.8%
-4.4%
5.3%
-6.6%
-6.0%
0.0%
-0.6%
-0.3%
-2.1%
EV/
EV/
EBITDA
EBIT
NM
2.5x
3.7x
5.8x
3.5x
7.7x
2.1x
3.4x
3.8x
8.3x
2.7x
8.6x
4.0x
2.0x
3.7x
7.4x
NM
3.1x
7.4x
5.3x
NM
3.7x
5.7x
4.8x
3.6x
3.4x
6.9x
4.4x
3.4x
1.2x
2.5x
6.3x
5.7x
5.6x
57.4x
1.3x
2.5x
2.2x
6.4x
5.6x
2.9x
6.6x
1.4x
NM
3.4x
3.7x
2.7x
2.4x
NM
5.8x
14.8x
NM
4.9x
8.1x
2.3x
Trend
NM
4.5x
4.8x
7.0x
10.5x
11.4x
3.6x
7.4x
11.1x
10.1x
5.4x
15.9x
4.5x
2.8x
6.8x
8.7x
NM
8.9x
10.2x
8.7x
NM
5.9x
6.3x
6.9x
4.7x
7.1x
7.3x
4.7x
5.2x
2.5x
3.5x
9.5x
75.3x
6.4x
NM
1.7x
3.4x
3.1x
7.7x
7.5x
5.9x
7.1x
3.1x
NM
3.8x
4.6x
8.9x
4.5x
NM
11.5x
27.6x
NM
10.8x
9.1x
11.0x
So urce: Capital IQ, LCC research
IMPORTANT DISCLAIMER
This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from
sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such
information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation
to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be,
nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for
any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made.
Page 2
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