Lycopodium closes SA deal

Engineering company Lycopodium has closed a deal to deepen its presence in Africa by buying a majority stake in a South African business.

Lycopodium would not disclose the value of the transaction, saying it was not material to the $123 million company.

Having completed due diligence, it has agreed to acquire 74 per cent of ADP Holdings, with options over the remaining share capital.

Necessary approvals are expected by the end of the year.

ADP is expected to contribute between 5 per cent and 15 per cent of the group's net profit.

Lycopodium managing director Rod Leonard said while his company had been operating in Africa for 20 years, the purchase would provide a design office on the continent.

It also offered exposure beyond its usual focus on gold and base metals.

"The main attraction is that it allows us to work in other commodities," Mr Leonard said.

"We've never done diamond projects per se. They're very strong in diamonds."

ADP also has a marine and modular arm which is involved in shallow-water mining and dredging.

Lycopodium said the combined forces of both companies would also allow entry into markets neither had meaningfully operated in before.

The WA company is funding the purchase from cash reserves.

Mr Leonard said the Australian mining sector remained in a lull for firms like Lycopodium.

"We're getting to the back end of the design phase of the big iron ore expansions," he said. "That is going to result in more competition among engineers around town for what's remaining."

The West Australian

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