Verbrec Alliance Automation Acquisition Reshapes Industrial Services Landscape

Verbrec Limited has executed a strategically significant acquisition that fundamentally transforms its position in Australia’s rapidly expanding industrial automation sector. The ASX-listed engineering services provider announced on 5 November 2025 that it has signed an agreement to acquire Alliance Automation Pty Ltd and its subsidiary DLM Automation Pty Ltd from Telstra Limited for $5.5 million in cash. This transaction represents a compelling five times EBITDA multiple based on Alliance Automation’s FY2025 performance, signalling exceptional value creation potential for shareholders.

The Verbrec Alliance Automation acquisition delivers immediate scale benefits, adding $62.4 million in annual revenue and creating a combined entity with approximately 700 team members across 18 locations spanning Australia and New Zealand. Furthermore, the transaction significantly expands Verbrec’s technical capabilities in high-growth areas including digital transformation, cyber security, industrial automation integration, and emerging technologies such as machine learning and artificial intelligence.

This strategic move positions Verbrec as one of Australia’s most comprehensive integrated industrial services providers, with capabilities spanning the complete asset lifecycle from design and construction through to operations, maintenance and decommissioning. The acquisition addresses a critical market opportunity as industrial clients increasingly demand integrated solutions that combine traditional engineering expertise with cutting-edge automation and digital capabilities.

What Makes the Verbrec Alliance Automation Acquisition Strategically Compelling?

The transaction delivers three fundamental value propositions that substantially enhance Verbrec’s competitive positioning and growth trajectory in the industrial services market.

Immediate Revenue Scale and Market Presence

The Verbrec Alliance Automation acquisition nearly doubles the company’s revenue base, creating a pro-forma combined entity generating $148 million in annual revenue. This represents a major step-change in Verbrec’s market presence, establishing the company as a significant player across key industrial sectors including mining, energy, infrastructure, manufacturing, water and wastewater treatment.

On a pro-forma basis for FY2025, the combined group achieves a gross profit margin of 37.5%, with Verbrec contributing $32.0 million and Alliance Automation adding $23.6 million in gross profit. This financial foundation provides substantial operating leverage for future growth initiatives and margin improvement opportunities.

Shared Client Base and Cross-Selling Opportunities

A particularly compelling aspect of the Verbrec Alliance Automation acquisition is the significant client overlap between the two organisations. Alliance Automation derives 41% of its revenues from clients already serviced by Verbrec, creating immediate opportunities for integrated service delivery and cross-selling across a tier-1 industrial client base.

This shared client foundation enables Verbrec to leverage its “whole of asset lifecycle” capability across a substantially broader service spectrum. Industrial clients increasingly prefer consolidated service providers who can deliver integrated solutions rather than managing multiple specialist contractors, positioning the combined entity favourably for contract expansions and new project wins.

Enhanced Technical Capabilities in High-Growth Markets

The acquisition provides Verbrec with world-class Industry 4.0 capabilities that complement its existing engineering and project delivery strengths. Alliance Automation brings over 275 engineers and professional staff with specialised expertise in digital transformation, automation integration, cyber security, and developing capabilities in machine learning and artificial intelligence.

These capabilities address rapidly growing market demand as industrial organisations pursue operational efficiency gains, predictive maintenance programmes, and digital transformation initiatives. According to industry analysts, automation spending across mining, energy and manufacturing sectors continues to accelerate, creating a favourable tailwind for the combined entity’s growth prospects.

How Will Alliance Automation Transform Verbrec’s Service Capabilities?

The Verbrec Alliance Automation acquisition fundamentally expands the company’s technical service portfolio, positioning the combined entity at the forefront of industrial digital transformation.

Industry 4.0 and Digital Transformation Leadership

Founded in 2010, Alliance Automation has established itself as one of Australia’s largest independent providers of digital transformation and industrial automation integration services. The company has built an enviable reputation as a certified integrator, implementing sophisticated Industry 4.0 solutions and control systems for tier-1 clients across multiple industrial sectors.

This expertise directly complements Verbrec’s traditional engineering strengths, creating a unique proposition in the Australian market. Clients can now access integrated services spanning traditional engineering design, project delivery, advanced automation systems, and ongoing operational support through a single provider relationship.

Expanded Geographic Footprint and Client Access

Alliance Automation operates across 11 Australian office locations, significantly expanding Verbrec’s geographic presence and providing enhanced client proximity across key industrial regions. The combined entity will operate from 18 locations spanning Australia and New Zealand, creating one of the region’s most comprehensive industrial services networks.

This expanded footprint delivers multiple strategic advantages:

• Enhanced client access and relationship management across major industrial hubs
• Improved ability to service multi-site clients with consistent service delivery
• Strengthened competitive positioning for national framework agreements
• Greater talent attraction and retention through expanded career opportunities across diverse locations

Advanced Technology Capabilities for Future Growth

The Verbrec Alliance Automation acquisition delivers critical capabilities in emerging technology areas that represent substantial future growth opportunities:

• Cyber Security: Essential capability as industrial control systems become increasingly connected and require robust security frameworks to protect against evolving threats
• Machine Learning and Artificial Intelligence: Developing expertise in AI applications for industrial optimisation, predictive maintenance and process improvement
• Automation Integration: Over 275 specialised engineers delivering sophisticated control systems, SCADA implementations and process automation solutions
• Digital Industry Solutions: Comprehensive Industry 4.0 implementation expertise spanning data analytics, IoT integration and digital twin technologies

Mark Read, Chief Executive Officer of Verbrec, commented: “This is a major step change for Verbrec’s capability and services offering, expanding our national presence and allowing us to deliver a broader range of services to our clients. This transaction will allow us to address our clients’ digital needs better than ever before and further strengthen our reputation as the recognised partner for a sustainable future.”

Chris Cooney, Chief Executive Officer of Alliance Automation, added: “Alliance Automation has always been at the forefront of innovation and engineering excellence. As part of Verbrec, our combined capability will enhance our team’s ability to better serve and deliver value to our customers.”

What Are the Financial Implications of the Verbrec Alliance Automation Acquisition?

The transaction structure and anticipated financial benefits demonstrate prudent capital allocation and significant value creation potential for Verbrec shareholders.

Transaction Funding and Capital Structure

The Verbrec Alliance Automation acquisition will be funded entirely through the company’s balance sheet, combining existing cash reserves with traditional debt funding. Importantly, no capital raising or equity issuance will occur in relation to the transaction, avoiding shareholder dilution whilst delivering substantial strategic benefits.

Verbrec has negotiated a new $6.0 million bank bill business loan under its Westpac finance facility to fund part of the $5.5 million purchase price and working capital requirements. In addition, the company will increase its bank guarantee and equipment finance facilities by $3.5 million, providing operational flexibility for the expanded business.

The financial position will be further strengthened by the previously announced divestment of the Competency Training business, which is expected to complete this calendar year and generate approximately $11.5 million in cash inflow. This strategic portfolio rationalisation demonstrates management’s disciplined approach to capital allocation, divesting non-core assets whilst investing in high-growth capability areas.

Attractive Valuation and Return Potential

The purchase price of $5.5 million represents a five times EBITDA multiple based on Alliance Automation’s FY2025 performance, which industry observers consider highly attractive for a business of this quality and strategic fit. The valuation reflects Alliance Automation’s adjusted EBITDA of approximately $2.1 million after accounting for one-off expenses and cost reductions implemented prior

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