- Saunders International recently marked its entry into technology-based infrastructure with the acquisition of PlantWeave Technologies.
- The transaction will open new avenues for the Company as its customers are increasingly moving towards technology-driven solutions.
- The transaction will be earnings per share accretive post integration.
The world is progressing towards automation to increase productivity and efficiency levels. The deployment of automation technologies in a sector depends on the nature of the activities performed.
Industrial automation in sectors like oil & gas, manufacturing, mining, and energy & power has been gaining traction in the recent years.
Seizing the opportunity, Saunders International Limited (ASX:SND), a multi-disciplined engineering and construction company, recently acquired PlantWeave Technologies, a specialist in industrial process automation and electrical systems.
Saunders is a well-known and established industrial solutions provider for design, fabrication, construction, shutdown, and maintenance services. In short, the Company caters to leading organisations across Australia and the Pacific Region with its innovative and cost-effective solutions.
On the other hand, PlantWeave Technologies caters to the needs of energy, power, water, manufacturing, oil & gas and mining industries. It provides tailored solutions to these industries, similar to the customer base of the SND.
PlantWeave specialises in the following services:-
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Saunders to beef up services to existing clients
Besides gaining exposure to the existing client base of PlantWeave, Saunders will continue to service and grow PlantWeave’s customers and markets.
The transaction will drive Saunders’ market entry into process optimisation, cyber security, Industry 4.0 Technologies, and industrial automation systems. The acquisition will enable Saunders to provide technology-driven solutions to its clients, as they seek to automate and remotely monitor, control, and maintain their facilities and processes.
The Company will expand its technical service offering to its existing clients in the oil & gas and resources sectors, as well as accelerate market penetration into the defence and utilities space.
The tank and piping services within refineries and terminals will be complemented by the Industry 4.0 solutions.
Automation market in Australia
It is estimated that nearly 46% of the work activities in the country could be automated by 2030. This will lead to enhanced productivity levels and accelerated economic growth.
Automation could easily add AU$1-4 trillion to the economy in the next 10 years, according to data from a report of McKinsey – Australia Automation Opportunity. The report talks about the automation of all industrial activities. It is to be noted that the industries catered by Saunders form a major part of the Australian economy.
Though it highlights that automation will impact job creation in the short run, the wealth created using automation could be invested in new sectors to create new opportunities.
In essence, the acquisition, which is anticipated to be earnings per share accretive post integration, will expand PlantWeave’s existing capabilities and reach while enhancing Saunders’ service offering to its existing customer base and diversifying into technology-based infrastructure.
Shares of SND traded at AU$0.75 with a market cap of AU$82.72 million on 14 October 2021.