Vysarn's Acquisition of Waste Water Services to Contribute Strongly to Earnings Growth, Euroz Hartleys Says

Vysarn's (ASX:VYS) planned acquisition of Waste Water Services is expected to contribute "strongly" to the vertically integrated water service provider's earnings growth in the coming years, likely bolstering its offering and diversifying revenue, said Euroz Hartleys in a Sept. 2 note.

Vysarn entered into a share sale agreement to acquire all of the issued shares in Waste Water for AU$7.5 million to be funded via cash and debt.

Waste Water delivered AU$12.1 million in revenue and AU$1.7 million in net profit after tax for fiscal 2024.

Euroz Hartleys noted a significant cross-sell opportunity arising from the deal, with preliminary synergies within the project engineering unit.

"The acquisition bolsters the control stage of the vertically integrated offering, improves revenue diversification, reduces cyclicality; and is expected to contribute strongly to earnings growth in coming years," the investment firm wrote in its note.

It added that estimates for fiscal 2025 will likely be materially derisked if the acquisition closes as scheduled by the end of November.

Euroz Hartleys maintained its buy rating on Vysarn and increased its target price to AU$0.48 from AU$0.45.

Vysarn's shares rose almost 5% in recent Tuesday trade.

Price (AUD): $0.46, Change: $+0.020, Percent Change: +4.60%