Babylon Pump & Power (ASX:BPP) will divest its non-core industrial services subsidiary Ausblast as part of a strategic shift to sharpen its focus on water management and rental services, agreeing to sell Pilbara Trucks, trading as Ausblast, to Sandgroper Group Holdings for $2.8 million cash.
The transaction, expected to be completed on Jan. 21, subject to standard conditions, implies a 5.6-times annualised EBITDA multiple based on Ausblast’s first-half FY26 performance, during which the business generated about $1.1 million in revenue and $0.25 million in EBITDA.
Babylon said proceeds from the sale will reduce net debt by around $1.5 million, with the remaining $1.3 million freed up for working capital and growth initiatives.
Managing director Michael Shelby said the divestment would simplify the group, reduce operational complexity and allow capital to be redeployed from a lower-growth segment into higher-return core activities, particularly its expanding rental fleet and specialist water management platform following recent acquisitions.
The deal will also result in a reduction to the group’s invoice finance and equipment finance facilities.