Red Earth Engineering (“Red Earth”) engaged Nash Advisory to run a process for the sale of up to 100% of the business.
As a team of ~60 highly specialised engineers with offices in Brisbane, Gold Coast and Perth, Red Earth is a leading geotechnical engineering and environmental services firm specialising in tailings dam engineering.
Red Earth was sold to Geosyntec Consultants, a USA based engineering consultancy majority owned by Blackstone Energy Partners.
Red Earth was founded in 2009 and has grown to become one of Australia’s largest geotechnical engineering firms dedicated specifically to tailings dams.
Although subject matter experts in tailings dams, Red Earth is a multi-disciplinary consultancy providing innovative, end to end environmental and mining infrastructure solutions – many of which are fundamental to clients’ ESG and risk management responsibilities.
Following a period of rapid growth, the Director’s at Red Earth approached Nash with the view to finding an aligned partner that could provide the infrastructure and systems to ensure Red Earth continued its growth.
Red Earth is a tight knit team with a unique culture. A key component of Nash Advisory’s mandate was to find a party that would value, foster and build upon this culture.
Nash Advisory conducted a global buyer search through its network, contacting a select list of parties that were considered a strong strategic and cultural fit for Red Earth. Geosyntec Consultants (USA based), renowned for its technical leadership and employee value proposition was chosen as the preferred party following receipt of a competitive non-binding indicative offer.
Nash performed detailed analysis on key operating metrics to clearly articulate the growth trajectory of the business. This included but was not limited to modelling the benefit of new hires, a detailed revenue analysis by client, site and service offering, a deep dive into business development, utilisation and billable rates by employee and assessment of trends in headcount and tenure. This analysis was a key driver of the decision to update the FY23 budget (see point 3) and formed the basis of a detailed information memorandum.
Nash’s internal analysis during the planning and preparation stage suggested that Red Earth would outperform their original FY23 budget. In light of this, Nash created a revised budget using management assumptions to present a more accurate view of the business’ future earnings. Bidders were guided to base their offer on these higher projected earnings, increasing sale value accordingly.
With a forecast for significant growth in FY23, it was important to minimise deal risk by providing confidence in Red Earth’s trading as the deal progressed through diligence. Nash created an in-depth data book and detailed trading updates showing performance against budget and leveraged strong trading results to negotiate contentious issues in Red Earth’s favour.
Nash Advisory was engaged by Red Earth to conduct a divestment
Nash Advisory taps into its international network to compile a targeted buyers list
Nash Advisory re-created Red Earth’s FY23 budget before taking the business to market
Information Memorandum shared with interested parties
Geosyntec Consultants granted exclusive due diligence
Extensive financial, tax, legal, commercial and HR Q&A in the data room
Geosyntec re-confirm their initial NBIO and negotiate final sale documentation. Nash work closely with Red Earth’s legal advisor, Wisewould Mahony
Definitive transaction documentation signed
When it comes to selling your business, Nash Advisory offers a highly detailed and extremely thorough process that produces the best possible results.