Resource Development Group buys Intellect Systems

Mining services company Resource Development Group (ASX:RDG) will acquire electrical engineering and industrial IT services company Intellect Systems in a cash and stock deal worth up to $5 million.

Intellect Systems provides electrical and control systems project services primarily to the mining and resources sector.

The company operates predominately in Australia, and has clients including BHP Billiton (ASX:BHP).

Resource Development Group will pay between $4 million and $5 million for the purchase, a quarter of which will be in cash and the rest in shares.

The company expects the acquisition to contribute up to $4 million in revenue and $1 million to ebit - and be earnings accretive - in year one.

Managing director Jeff Brill said the purchase is “part of a planned series of acquisitions that are in line with our strategy to build a vertically integrated mining services business.”

RDG shares stayed flat on Thursday at $0.250.