Strategic move adds recurring revenue, expands services, and strengthens east coast footprint
Southern Cross Electrical Engineering (ASX: SXE) is turning up the heat with a strategic acquisition in the fire protection space, announcing it will acquire Force Fire Holdings for up to $53.5 million. The deal strengthens SCEE’s footprint in the growing fire safety sector, while also boosting its exposure to recurring, maintenance-style revenue.
The acquisition is set to complete on 1 April 2025.
Why Force Fire?
Founded in 2004 and based in Sydney, Force Fire is a specialist provider of fire safety solutions across New South Wales and Queensland. It employs more than 200 staff, including 140 skilled technicians and 30+ electrical tradespeople. The business provides both wet fire (mechanical) and dry fire (electrical) systems, servicing a loyal and diversified client base across commercial buildings, industrial assets, and data centres.
Force Fire is on track to deliver $106 million in revenue and $8.3 million EBIT in FY25, with EBIT expected to grow to $10 million in FY26.
Deal terms and funding
SCEE is paying:
- $36.3 million upfront in cash, fully funded through its existing reserves
- Up to $5.2 million in deferred consideration, tied to FY25 and FY26 EBIT targets
- Up to $12 million in contingent earn-outs, based on FY25–FY27 performance
If all targets are hit, the total deal implies a 4.8x EV/EBIT multiple for FY25, dropping to 4.1x by FY27 if EBIT rises to $13 million.
Importantly, the transaction is expected to be EPS accretive by at least 18% on a FY25 pro forma basis, although SCEE notes the FY25 bottom-line impact will be neutral due to deal costs.
A natural fit with strategic upside
Managing Director Graeme Dunn described Force Fire as “a natural adjacency” to SCEE’s electrical and communications capabilities.
“The fire sector fits neatly into our strategy and brings further exposure to infrastructure, data centres, and electrification – all growth markets for us,” he said.
Around 30% of Force Fire’s revenue already comes from recurring maintenance and minor works, offering the kind of stable cash flow SCEE is targeting. The acquisition also opens up cross-selling potential, plus a platform for further consolidation in the fragmented fire services market.
Force Fire’s management team will remain on board post-acquisition, providing continuity and helping integrate the business into SCEE’s broader operations.
