Service Stream has agreed to buy facilities and staffing group Programmed for A$975 million, in a binding deal that would more than double the Australian infrastructure services company's revenue base. The agreement, announced on Monday 9 November, is with Persol Asia Pacific, the Japanese-owned seller of Programmed, and is expected to complete around 1 March 2027 if competition approval and other conditions are met.

What the combined business would look like

Programmed was established in 1951 and serves about 5,000 active customers from around 200 locations, employing roughly 6,600 people and drawing on a pool of about 8,000 specialist contractors. Its customers span government, social housing, transport, utilities, education, health, resources and industrial markets. In the 12 months to June 2026 it generated about A$3.68 billion in revenue and A$148 million in earnings before interest, tax, depreciation and amortisation (EBITDA).

On a combined pro forma basis, Service Stream and Programmed had annual revenue of about A$6.16 billion and EBITDA of A$312 million before synergies, with total work in hand of A$12 billion. Programmed's facility management division alone held about A$3.8 billion of work in hand as of May, with a further A$2.7 billion in potential contract extension options.

Savings, funding and conditions

Service Stream expects initial annual cost savings of A$30 million, with half targeted within 18 months of completion and the full amount within 36 months. The savings are expected to come mainly from resourcing and procurement, along with property, technology and other overhead efficiencies, at an estimated one-off integration cost of A$35 million. Including the savings, management forecasts more than 20 per cent accretion in adjusted earnings per share on a pro forma 2027 financial-year basis, compared with mid-single-digit accretion before synergies.

The purchase will be funded by a fully underwritten A$475 million equity raising, comprising a A$219 million institutional placement and a A$256 million accelerated non-renounceable entitlement offer on a one-for-4.9 basis. Both parts are priced at A$2.03 a share, a 7.7 per cent discount to the A$2.20 closing price on 6 November, with about 234 million new shares to be issued. Service Stream also plans to draw A$490 million of debt and contribute A$50 million of existing cash, after lifting its total debt facilities from A$395 million to A$895 million.

The A$975 million price remains subject to working-capital and debt adjustments, and could be reduced by up to A$25 million if Programmed misses a specified earnings hurdle for its financial year ending 31 March 2027. The deal implies an enterprise value of about A$1.09 billion including lease liabilities. Completion is subject to approval from the Australian Competition and Consumer Commission and other conditions, including the retention of specified material customer contracts. Service Stream managing director Leigh Mackender described the acquisition as a significant milestone that would bring together two businesses with complementary capabilities.