Alpha Fire Services to acquire HVAC firm in Rs.260mn share-swap deal

Alpha Fire Services PLC shared plans to acquire Icon Engineering Enterprises (Pvt.) Ltd, a heating, ventilation and air-conditioning (HVAC) solutions provider operating in Sri Lanka and the Maldives, in a Rs.260 million transaction that would be settled through a share swap, as the listed company moves to expand its engineering services portfolio and strengthen its presence in integrated building solutions.

In a disclosure to the Colombo Stock Exchange (CSE), Alpha Fire Services said its board had approved the acquisition of 100 percent of Icon Engineering’s issued shares and the issuance of new ordinary voting shares to the selling shareholders as consideration for the deal.

The company said the acquisition would help position Alpha as a full-service mechanical, electrical and plumbing (MEP) turnkey solutions provider by combining Icon Engineering’s HVAC expertise with its existing fire protection and engineering capabilities.

Alpha Fire Services noted that Icon Engineering recorded a strong financial performance in the 2025/26 financial year and maintains a healthy project pipeline for the coming year. Following the acquisition, the combined group’s revenue is expected to exceed Rs.1 billion, while the overall profitability is projected to increase by around 30 percent. The company also expects additional foreign currency earnings from Icon Engineering’s project work in the Maldives, which generates revenue in US dollars.

Under the proposed transaction, Alpha Fire Services will acquire 10,000 shares representing the entire issued share capital of Icon Engineering. The consideration of Rs.260 million will be settled through the issue of 9.12 million new ordinary voting shares, at an implied value of Rs.28.50 per share.

Mayfair Capital (Pvt.) Ltd, which owns 7,000 shares of Icon Engineering, will receive 6.39 million new Alpha Fire shares, while Directors K.M.A. Viraj Fernando and J.A.R. Wijeyesinghe, who each holds 1,500 shares in Icon Engineering, will receive 1.37 million shares each.

The transaction has been valued by KPMG. The new shareholders will collectively hold 19.38 percent of Alpha Fire Services’ enlarged share capital.

The acquisition also constitutes a related-party transaction, under the CSE Listing Rules, because the shareholders of Mayfair Capital are also shareholders of ATX Partners (Private) Limited, which together with the parties acting in concert holds 60.13 percent of Alpha Fire Services. In addition, Fernando and Wijeyesinghe serve as Directors of the company. The Related Party Transactions Review Committee has determined that the deal is being conducted on arm’s-length terms and is not prejudicial to the minority shareholders.

The proposed share issue and acquisition remain subject to the CSE approval in principle for the listing of the new shares and shareholder approval at a general meeting.