OTOC snaps up another complementary business

//OTOC snaps up another complementary business
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Construction, maintenance and planning group, OTOC, announced on Monday that it had acquired the business and assets of WKC Spatial, a provider of surveying and geospatial services for pipeline infrastructure, construction and engineering, land and cadastral projects.

Based in Perth, WKC is a national leader in pipeline infrastructure, having completed over 15,000 kilometres of pipeline construction projects in Australia.

OTOC noted that in recent years WKC had diversified its services to include a range of specialist geospatial services for  infrastructure projects such as laser scanning, modelling and mapping, making it an excellent fit with the group’s surveying business.

Having been established in its core areas for 30 years, WKC also brings a strong client base of blue-chip customers, providing OTOC with cross selling opportunities.

The other key attraction of this acquisition is the fact that the business generates substantial income from essential services areas such as airports, refineries and the development of infrastructure central to the provision of basic consumer services.

Market Wire last reviewed OTOC on June 30 after the company announced the acquisition of Lawrence Group, a development that strengthened the company’s surveying business in New South Wales, as well as adding scale and capability to its existing surveying business in civil infrastructure.

It is OTOC’s diversification into the fragmented surveying sector that makes the company more compelling, particularly given it decreases the group’s reliance on traditional mining services income. Market Wire first highlighted this in March when the company’s shares were trading at 17 cents, and they have nearly doubled since then, hitting a recent high of 31 cents.

The company tends to fly under the radar, and even after the recent share price increase there could be more upside to come, particularly if management provides an upbeat guidance statement when delivering the full-year result in August.

In fiscal 2017 OTOC will benefit from substantial acquisitions made in fiscal 2016, suggesting that management could have some confidence in outlining the group’s significant growth potential over the next 12 months.

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