ASX All Ords share IPD Group Ltd (ASX: IPG) is charging higher today.
Shares in the electrical market distributor and service provider closed yesterday trading for $4.59. In morning trade on Friday, shares are swapping hands for $4.70, up 2.4%.
In contrast, the All Ordinaries Index (ASX: XAO) is down 0.3% at this same time.
Here’s what’s stoking investor interest in this ASX All Ords share today.
What’s catching ASX investor interest?
The IPD Group share price is gaining after the ASX All Ords share reported it has acquired Perth-based EX Engineering Pty Ltd.
EX Engineering specialises in designing, stocking, supplying, modifying and repairing electrical hazardous area equipment. This is commonly referred to as ‘Ex equipment’.
IPD noted that the safety and certification-intensive nature of this work throws up significant barriers to entry. Or moats, as we like to say.
Flagging potential tailwinds for this ASX All Ords share, the company said the acquisition would significantly enhance its Ex equipment offering. IPD said it would focus on expanding its EX Engineering segment to the eastern states. The vendors (and founders) of EX Engineering will remain with IPD to lead the expansion.
IPD listed the purchase consideration as $10.2 million. This consists of $9.2 million in cash and $1.0 million worth of newly issued IPD shares. IPD will fund the cash payment from its existing cash reserves.
Based on unaudited management accounts for the year to 30 June, EX Engineering generated revenue of $12.4 million and normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $2.5 million.
Commenting on the acquisition that’s sending the ASX All Ords share sharply higher today, IPD CEO Michael Sainsbury said:
Using IPD’s national sales force and footprint, we will be able to expand the successful EX Engineering model across Australia from its current base in WA. With EX Engineering in our portfolio, IPD can now supply electrical Ex equipment to our customers.
The acquisition is earnings accretive to IPD and is expected to complete today.
The company will update shareholders with additional details on the acquisition when it reports its FY23 results on 25 August.
How has this ASX All Ords share been tracking?
IPD Group is a relative newcomer to the ASX, having listed in December 2021. And shares have trended steadily higher ever since.
Over the past 12 months, the ASX All Ords share has gained 153%. Shares are up 70% so far in 2023.
