Southern Cross Electrical Engineering acquires Entire Operations in up to $112.1M deal
Southern Cross Electrical Engineering (ASX: SXE, “SCEE”) has executed a Share Purchase Agreement (SPA) to acquire 100% of the issued shares in Entire Operations Pty Ltd, a Victorian fire protection and mechanical (HVAC) services group. Total consideration is up to $112.1M on a cash-free, debt-free basis, to be funded through SCEE’s existing cash reserves.
The Entire Operations acquisition also lifts SCEE’s FY27 EBITDA guidance to at least $110M, including Entire’s forecast FY27 EBITDA contribution of $10M, assuming completion on 1 November 2026.
Completion is expected on or about 1 November 2026 and is subject to customary conditions for a transaction of this nature. For investors, the announcement combines a cash-funded purchase, higher earnings guidance and entry into a new discipline.
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Transaction terms and earn-out structure
The consideration is split between an upfront cash payment and deferred earn-outs tied to Entire’s EBIT (earnings before interest and tax) in FY27, FY28 and FY29. The full amount is payable in cash.
The cash funding follows SCEE’s $165M capital raise in June 2026, which strengthened the balance sheet and gave the Group the financial capacity to pursue acquisitions without new debt or equity.
| Component | Amount | Condition | Timing |
|---|---|---|---|
| Upfront cash consideration | $70.0M | Completion | On Completion |
| Base Earn-Out Amounts | Up to $25.8M ($8.6M per year) | Entire EBIT of at least $17.0M in each year | Following FY27, FY28 and FY29 results |
| Outperformance Earn-Out Amounts: FY27 | Up to $3.3M | EBIT of at least $21.4M | Following FY27 results |
| Outperformance Earn-Out Amounts: FY28 | Up to $5.1M | EBIT of at least $23.8M | Following FY28 results |
| Outperformance Earn-Out Amounts: FY29 | Up to $7.9M | EBIT of at least $27.5M | Following FY29 results |
The Outperformance Earn-Out Amounts total up to $16.3M. If the relevant EBIT target is not achieved in a given year, the payment is reduced on a pro rata basis down to nil at an EBIT level of $17.0M.
The Purchase Price represents the following EBIT multiples:
- 5.5x FY26A EV/EBIT, assuming the sellers receive the maximum Base Earn-Out Amounts.
- 4.1x FY29F EV/EBIT, assuming the sellers receive the maximum Outperformance Earn-Out Amounts (implying an EBIT of at least $27.5M in FY29F).
Of the up to $112.1M total, $70.0M is paid on Completion. The remainder depends on Entire reaching the EBIT targets, which links the sellers’ outcomes to the business’s performance under SCEE’s ownership.
Who is Entire?
Established in 1985 and headquartered in Melbourne, Entire provides integrated fire protection and mechanical (HVAC) services, supported by in-house pipe fabrication and prefabrication. Its capabilities span engineering, design, fabrication, construction, commissioning, minor works and recurring maintenance.
Key facts from the announcement:
- FY26 revenue of $191M and FY26 EBIT of $17.5M.
- Over 490 staff across Victoria and Queensland, with operations primarily in Victoria and a growing presence in Queensland.
- Data centres made up approximately 25% of FY26 revenue.
- Service and maintenance now accounts for approximately 35% of revenue.
- End markets include data centres, infrastructure, health care, commercial building developments and government.
Entire has a large directly-employed technical workforce and an internal apprenticeship pipeline.
Rod Sekulich, Managing Director, Entire
“Joining the SCEE Group is a proud moment for Entire and the start of an exciting new chapter for our business and our people…”
Strategic rationale: HVAC entry and national fire platform
SCEE stated the acquisition is consistent with its strategy to add adjacent and complementary capabilities, while increasing its exposure to critical services and recurring revenues.
Mechanical (HVAC) adjacency
Entire provides SCEE with an entry into mechanical services, broadening the Group’s ability to deliver integrated, multi-disciplinary solutions. SCEE pointed to structural tailwinds, including the need for building owners to meet increasingly stringent energy efficiency standards, often requiring significant upgrades to power and electrification of HVAC systems.
National fire services platform
The acquisition advances SCEE’s strategy to build a national fire services platform. Entire’s established presence in Victoria is described as highly complementary to SCEE’s existing footprint in NSW and Queensland.
Recurring revenue and cross-sell
Entire’s service and maintenance offering across fire and mechanical services complements its construction operations. SCEE said these recurring services provide greater earnings resilience, deeper long-term customer relationships and opportunities to cross-sell services across the combined Group.
What are earn-outs and EV/EBIT multiples?
An earn-out is a deferred payment made to sellers only if the acquired business hits agreed performance targets. EV/EBIT compares the price paid for a business (enterprise value) with its annual earnings before interest and tax. A lower multiple means less is paid for each dollar of earnings.
The two multiples disclosed are:
- 5.5x FY26A EV/EBIT, based on maximum Base Earn-Out Amounts.
- 4.1x FY29F EV/EBIT, based on maximum Outperformance Earn-Out Amounts.
Graeme Dunn, Managing Director, SCEE Group
“Mechanical (HVAC) is a logical adjacency for SCEE given the attractive sector tailwinds we are both exposed to with significant investment in data centres, energy efficiency and electrification.”
Earnings impact and investment case
The announcement sets out the following financial effects:
- The transaction is forecast to result in at least 18% EPS accretion on a FY27F pro forma basis.
- SCEE anticipates Entire EBIT of at least $17M per annum, with future growth expected.
- FY27 EBITDA guidance is increased to at least $110M, including Entire’s forecast FY27 EBITDA contribution of $10M, which assumes completion occurs on 1 November 2026.
The higher guidance builds on a record FY26 result, which closed with a $810M order book, a debt-free balance sheet and data centre revenue forecast to roughly triple in FY27.
All of the existing employee executive shareholders of Entire will remain employed with the business under SCEE’s ownership on long-term employment contracts extending beyond the earn-out period.
The acquisition further builds SCEE’s national fire services platform. The announcement also states that further growth beyond is expected in SCEE and Entire.
Completion conditions and next steps
Completion is conditional on several conditions precedent described as standard for a transaction of this nature, including:
- ACCC waiver or approval.
- No material adverse change in Entire.
- Execution of employment contracts with the existing employee shareholders.
- Release from Entire’s existing financial arrangements.
Due diligence is finalised. The SPA contains a standard set of warranties covered by a buy-side warranty and indemnity insurance policy, subject to limited exclusions, and includes standard termination rights in favour of SCEE.
MA Moelis Australia is acting as corporate adviser, EY as financial, payroll and tax due diligence adviser, and K&L Gates as legal adviser to SCEE.
Completion is expected on or about 1 November 2026. SCEE sees opportunities to accelerate Entire’s existing growth initiatives by leveraging its national footprint, customer relationships and financial capacity.
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