SYDNEY: Alfabs Australia Limited (ASX: AAL) said it has agreed to acquire the pump business assets of J&J Vac Pty Ltd, including eight UVU pumps, the right to manufacture the pumps as original equipment manufacturer, and the transfer of third-party orders for four additional units.

The upfront consideration is $2.0 million, with contingent consideration of $80,000 per additional pump manufactured and either hired or sold by Alfabs, capped at 25 additional pumps for a maximum of $2 million. The acquisition will be funded from existing cash and debt facilities and remains subject to customary conditions precedent, with settlement expected in November 2026.

J&J builds, hires and sells two pumping units, the UVU pump and MGUVU pump, to the underground coal mining market, principally in New South Wales. The pumps, developed by adapting technology used in the waste industry, manage liquid and semi-solid material underground. Alfabs said it has validated pump performance both internally and with existing end users.

Alfabs said the acquisition adds a hire-ready product line expected to contribute revenue and EBITDA from day one. The business will be integrated into Alfabs’ existing hire operations, using established customer relationships, workshop capacity and technical expertise without additional overheads. As OEM, Alfabs will also have the opportunity to generate revenue through spare parts, maintenance and servicing.

The company said the deal provides a growth option through access to its larger underground mining customer network across New South Wales and Queensland. Orders for four additional UVU pumps will transfer to Alfabs on acquisition, which the company said validates market demand. Alfabs will build and sell those pumps with transitional support from J&J.

Alfabs said the bolt-on acquisition is consistent with its capital allocation framework and that expected returns exceed the group’s investment hurdle rates. The upfront investment provides immediate access to an established revenue-generating asset base, while future manufacturing investment can be aligned with confirmed customer demand.

The acquisition is not expected to materially affect Alfabs’ balance sheet or its previously communicated capital management priorities. The company said it continues to progress its Phase II debt restructuring, the remaining step required for the board to consider reinstating the dividend. Due diligence on the debt restructure is well advanced, and the company will update the market in due course.

Alfabs is a diversified Australian mining and engineering company serving the underground mining, infrastructure and industrial sectors. It provides equipment hire, maintenance, engineering fabrication, site installation and related services from operations along Australia’s east coast. Founded in the 1950s and headquartered in Kurri Kurri, New South Wales, the company said it has long-standing relationships with Australian mining and infrastructure customers.