EXCLUSIVE: An Australian business which is growing rapidly on the back of the energy transition and the drive for environmental sustainability is considering a sale that could value it at up to A$1.5 billion, and is also planning to establish a United States manufacturing base.
NOJA Power Switchgear Pty Ltd has appointed investment manager Ellertson Capital and global investment bank Harris Williams as joint lead managers of a sale process likely to be completed in the first half of 2025.
Chairman and Group Managing Director Neil O’Sullivan said the shareholders of the electrical switchgear manufacturer could sell a significant stake to an investment bank, divest to a business in the same industry or proceed with an initial public offering (IPO).
“All of the options are on the table and it's just a matter of being guided by the joint lead managers that we've appointed as to as to what the process is,” O’Sullivan told Azzet.
“We've already had a lot of interest from investment bankers, and we've already had a lot of interest from trade buyers. So those are the avenues that are currently being pursued. But there's certainly the option to run an IPO on the table as well.
“Whatever decision we make will certainly have a big employee focus to make sure that they are going to have a better opportunity under the new shareholding structure than what they have today.”
O’Sullivan estimated NOJA Power could have an enterprise value of $1.3 billion to $1.5 billion by applying the multipliers used to value similar companies to the earnings before interest and tax forecast for the year to 30 June 2025 of $80 million.
“We're likely to exceed that based on our year to date performance and our back order book,” he said.
He exclusively revealed to Azzet that NOJA Power was forecasting EBITDA to increase by 25% to $80 million and revenue by 46% to $210 million in the 2025 financial year (FY25) after growth of 70% and 34% respectively in FY24.
The Brisbane-based company, which was founded 22 years ago and exports to 106 countries, is owned by O’Sullivan (54%), Ellerston (12%), fellow founders Quynh Anh Le (14%) and Oleg Samarski (14%) and joint founder and former executive Jay Manne (6%).
He said NOJA Power had “huge growth potential” as the electricity industry ‘super cycle’ driven by the transition from fossil fuels to renewable energy increased demand for its pole-mounted reclosers, which act like safety switches to protect distribution networks.
O’Sullivan said the business was likely to double its FY25 forecast revenue of $210m over the “next few years” based on demand for new products like EcoLink.
Another factor he cited for strong demand was the decision 22 years ago to develop products with sustainable technology rather than the oil or the environmentally-damaging sulfur hexafluoride gas (SF6) used by competitors.
“One of the things that we did when we founded the company was decide that we wanted to make sustainable switch gear. At the time, it wasn't a sexy thing to do so I think we were quite ahead of the game and it's one of the things that I think has really driven the success of NOJA Power over the years,” O’Sullivan said.
He also revealed NOJA Power planned to establish a manufacturing facility in Dallas to drive growth in the United States, where its market share of less than 10% lags the 20% to 30% share it holds in other markets around the world.
“The U.S. is a current challenge for us but we'll overcome that and one of the ways is to build a factory in Dallas. I think we could balance that in the U.S. reasonably quickly with (this factory),” he said.
