RPM Global (ASX:RUL) acquires ESG company Blueprint Environmental Strategies

Highlights 

  • RPM Global takes over ESG company to address growing demands of mining industry clients.
  • ASX:RUL will fund the acquisition via cash and shares.
  • RUL shares have fallen post announcement on ASX.

Mining tech solutions provider RPM Global Holdings Limited (ASX:RUL) is acquiring an Environmental Social and Governance (ESG) services company, Blueprint Environmental Strategies Pty Ltd. RUL will, under a share purchase agreement, acquire 100% of Blueprint's issued share capital.

About ESG company Blueprint

Founded in 2017, Blueprint is a Perth headquartered business that works with mining industry clients to provide independent, timely, and quality-oriented ESG services. Blueprint's business encompasses services at all phases, from feasibility, development, operations to closure and site restoration.

Blueprint’s team consists of ESG professionals across disciplines like environmental science, geoscience, risk management, impact assessment, due diligence, governance, social licensing, and even geographic information systems.

Acquisition motivation

RPM global is acquiring ESG business Blueprint under its operational goal of growing its mining-focused ESG capabilities both organically and inorganically. In addition, it is expanding its ESG team to address the increasing demand for ESG services and technology solutions in the mining industry.

RPM already has a separate ESG mining division. Previously in July, it has acquired Brisbane-based ESG company Nitro Solutions for growth. Perth-based Blueprint's current acquisition provides RUL with increased capability and proven experience for its mining clients.  The addition shall benefit its longstanding client relationships, particularly with metals businesses in Western Australia – a critical market for RPM global.

Transaction consideration

  • RPM global will pay a total consideration of approximately AU$3.5 million to Blueprint.
  • Consideration will consist of a one-off cash payment of AU$2 million on completion and AU$1 million worth of RUL shares.
  • RPM global shall also pay a working capital adjustment of around AU$0.5 million after ninety days of transaction completion.
  • RUL will entirely fund the cash consideration from its existing cash reserves.
  • RPM will on acquisition issue 530,178 RUL shares to Blueprint's outgoing shareholders.
  • Half of these shares will be under escrow for 12 months, a quarter for 24 months, and another for 36 months, post-acquisition.
  • RUL shares will be issued using existing capacity under listing rules.
  • The acquisition is to close on 30 September 2021 after the satisfaction of precedent and customary conditions.

RUL shares closed in red at AU$1.850 per share.

Bottom line

Growing needs of ESG compliance have pushed RUL to acquire an ESG company blueprint. The addition, however, will act favorably for its long-term client relations, especially in the mining sector. The mining industry is fast pacing ESG compliance, and ESG solutions in the sector will remain in demand for the long term.

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