Strategic Value and Synergy Potential in the M&A Activity Between SRG Global Limited and TAMS Group Pty Ltd

Australia's professional services sector, valued at $305.7 billion in 2025, is navigating a complex landscape of headwinds and opportunities, according to a NewsnReleases announcement. Despite a 0.2% annual revenue decline through 2024–25, driven by construction delays and economic uncertainty, the industry is poised for growth as sustainability and digitalization reshape demand, the announcement also noted. Against this backdrop, the $85 million acquisition of TAMS Group Pty Ltd by SRG Global Limited stands out as a strategic move to capitalize on market dynamics while enhancing capital allocation efficiency.

Strategic Rationale: Diversification and Market Positioning

SRG Global, a diversified infrastructure services provider with a $1.624 billion market cap according to the 2025 M&A report, has acquired TAMS, a marine infrastructure specialist described on the TAMS website, to strengthen its foothold in high-growth sectors such as energy, water, and defense. TAMS's end-to-end marine services-spanning design, construction, and maintenance-complement SRG's existing capabilities in engineering and construction, as noted in the acquisition announcement. This alignment is critical as government infrastructure projects and sustainability-driven investments gain momentum. For instance, TAMS's expertise in port and marine infrastructure positions the combined entity to benefit from Australia's push for renewable energy and resource sector modernization, details of which are highlighted on TAMS's site.

The acquisition also reflects broader M&A trends in the sector. Succession planning and the pursuit of recurring revenue models are driving consolidation, with mid-market deals averaging 8x EBITDA multiples, as the Morgan Business Sales report finds. TAMS's projected FY26 EBITDA of $35 million, disclosed in the announcement, suggests a valuation multiple of approximately 2.4x, significantly below the sector average. This discrepancy highlights SRG's ability to secure a bargain, leveraging TAMS's self-perform capabilities and established client relationships in resources and government sectors, as described by TAMS.

Financial Synergy and Capital Allocation Efficiency

The deal structure underscores SRG's focus on capital efficiency. The $85 million cash-free, debt-free transaction is funded 67% by existing cash and debt facilities and 33% by SRG shares issued at $1.99, a 23% discount to its October 2025 stock price of $2.65, according to the announcement. This approach minimizes dilution while preserving liquidity for future growth. Additionally, a two-year earn-out tied to TAMS's EBITDA performance aligns vendor incentives with long-term value creation.

Financially, the acquisition is projected to be 25% accretive to SRG's FY26 earnings per share before synergies, per the announcement. TAMS's $200 million revenue and $35 million EBITDA forecasts suggest a strong contribution to SRG's top and bottom lines. The combined entity's expanded scale could further reduce costs through shared services and procurement efficiencies, while cross-selling opportunities in marine and terrestrial infrastructure projects enhance revenue potential, as TAMS's materials indicate.

Broader Sector Implications and Risks

The SRG–TAMS deal mirrors the sector's shift toward specialization and consolidation. As noted by the Morgan report, one-third of companies plan multiple acquisitions over the next three years, driven by the need to adapt to regulatory and technological changes. However, macroeconomic uncertainties-such as regulatory scrutiny under the ACCC and FIRB-remain risks. For SRG, integrating TAMS's 500+ workforce and international trade experience will require careful execution to realize synergies.

Conclusion

The SRG–TAMS acquisition exemplifies strategic capital allocation in a sector transitioning toward sustainability and digitalization. By acquiring a niche player with complementary capabilities at a favorable valuation, SRG strengthens its market positioning while aligning with long-term industry trends. For investors, the deal offers a compelling case study in leveraging M&A to drive growth in a cautiously optimistic Australian M&A environment, as highlighted in the 2025 M&A report.