Strategic Acquisition - USA

Key points

• Acquires 100% of US-based parking operator Peak Parking for up to USD$36m
• Acquisition to be funded by A$45m equity raising and expanded debt facility
• Expects >25% EPS accretion in FY25 on a pro forma basis

Full summary

Smart Parking Ltd (ASX:SPZ) has entered into a binding agreement to acquire 100% of the issued capital in Peak Parking LP, a prominent and diversified US-based parking services business, for an acquisition price of up to USD$36m. The consideration includes an upfront payment of USD$32m (USD$26m cash, USD$6m in SPZ scrip) and a sliding scale earnout of up to USD$4m based on Peak Parking achieving CY25 EBITDA of USD$4.5m (paid in SPZ scrip). The acquisition is expected to deliver >25% EPS accretion in FY25 on a pro forma basis, with future revenue and margin expansion opportunities through implementation of Smart Parking's technology platform. The acquisition will be funded by a A$45m equity raising comprising a A$32.2m placement and A$12.8m pro-rata entitlement offer, fully underwritten by Canaccord Genuity. Smart Parking has also expanded its revolving credit facility with HSBC from A$10m to US$10m to partially fund the acquisition. Peak Parking is a boutique US parking operator with 134 locations across six states, delivering revenue CAGR of 45% from CY22-CY24 and CY24 EBITDA of USD$3.3m. The acquisition represents an implied EV/CY25 EBITDA multiple of 8.0x, assuming CY25 EBITDA of USD$4.5m is achieved.

Guidance

Smart Parking expects the acquisition to deliver >25% EPS accretion in FY25 on a pro forma basis.

Outlook

The acquisition provides immediate geographic expansion into the US leveraging Smart Parking's proprietary technology, is aligned with Smart Parking's long-term growth strategy and is expected to deliver immediate EPS accretion.