SKS Technologies Group has completed the acquisition of Delta Elcom, a Sydney-based specialist in data centre and electrical infrastructure, marking a significant step in the company’s growth strategy. The deal expands SKS’s footprint in the fast-growing NSW data centre market while adding meaningful scale and capability. For investors, the transaction highlights SKS’s ambition to consolidate its position as a diversified electrical and digital infrastructure provider.

Overview of the Acquisition

SKS Technologies Group Limited (ASX: SKS) has finalised the acquisition of the business of Delta Elcom Pty Ltd, following an earlier announcement in December 2025. Delta Elcom is a specialist electrical and communications contractor with a strong focus on data centre infrastructure and mission-critical environments. The business generates annual revenues of approximately $25 million and operates primarily out of Sydney, servicing clients across Australia.

The acquisition consideration consists of an upfront cash payment of $10.5 million, alongside a $2 million equity component to be satisfied through the issue of 612,501 new ordinary shares in SKS. These shares are intended to be issued immediately. In addition, the transaction includes an earn-out of up to $1.25 million, contingent on Delta Elcom’s financial performance during the 2026 calendar year.

This structure balances upfront certainty with performance-based incentives, aligning the interests of both parties. The final purchase price remains subject to customary post-completion adjustments, which are expected to be finalised in the coming weeks.

Strategic Rationale Behind the Deal

The acquisition of Delta Elcom represents a natural extension of SKS Technologies’ existing capabilities and strategic priorities. SKS already operates across audio visual, communications, and electrical solutions, serving sectors that include data centres, defence, mining, health, retail, and commercial construction.

Chief Executive Officer Matthew Jinks described the acquisition as the next logical step in accelerating SKS’s plans to gain greater market share in the NSW data centre market, while also supporting growth in its traditional sectors. Data centres remain one of the most attractive infrastructure segments in Australia, driven by cloud adoption, artificial intelligence workloads, and the ongoing expansion of digital services.

By adding a specialist contractor with deep experience in complex data centre projects, SKS enhances its ability to compete for larger, higher-value contracts. This may improve tender success rates and support more consistent revenue growth over the medium term.

What Delta Elcom Brings to SKS

Delta Elcom delivers end-to-end electrical and communications solutions for complex infrastructure projects. Its capabilities span design, installation, and maintenance, with particular expertise in data centre construction, network cabling, and integrated technology systems.

The company’s track record in mission-critical environments is strategically important. These projects demand high levels of reliability, compliance, and technical execution, qualities that align closely with SKS’s existing service offering. The acquisition also opens opportunities for cross-selling services across SKS’s national customer base.

With approximately $25 million in annual revenue, Delta Elcom adds immediate scale to SKS’s operations. Subject to integration and margin performance, the acquisition has the potential to be earnings accretive over time.

Funding Structure and Earn-Out Mechanics

The funding mix for the acquisition reflects a disciplined approach to capital management. The $10.5 million cash payment represents a meaningful but manageable outlay for SKS, while the equity component reduces pressure on near-term cash flow.

The earn-out of up to $1.25 million introduces a performance-based element that limits downside risk for SKS while incentivising Delta Elcom to maintain momentum through 2026. Earn-outs of this nature are common in specialist services acquisitions, particularly where ongoing management and operational performance are critical to value creation.

Planned Issue of New Ordinary Fully Paid Shares

Alongside the acquisition, SKS Technologies has confirmed plans to issue up to 612,501 new ordinary fully paid shares, with an intended issue date of 12 January 2026. This share issue corresponds with the equity component of the Delta Elcom transaction and forms part of SKS’s broader funding strategy.

With approximately 114.7 million shares already on issue, the dilution impact is modest. The additional shares represent well under 1 percent of the existing share base, which limits the effect on earnings per share for current investors. Management appears to be using equity selectively, rather than pursuing a larger capital raising.

From a strategic standpoint, the share issue preserves balance sheet flexibility while enabling SKS to continue investing in growth. Market commentary has characterised the issuance as broadly value neutral, particularly given the earnings potential and strategic fit of the acquisition.

SKS Technologies Business Snapshot

SKS Technologies Group specialises in the design, supply, and installation of audio visual, electrical, and communications products and services across Australia. The group services a wide range of industries, including data centres, defence, mining, health, retail, and commercial construction.

The company operates within the Industrials sector and is positioned as a diversified infrastructure services provider. Key fundamentals include earnings per share of $0.125, a dividend per share of $0.06, and a book value per share of $0.212. SKS has approximately 114.7 million shares on issue and a market capitalisation of around $450 million.

Share Price Performance and Market Sentiment

SKS shares were last trading at $3.92, up 1.55 percent on the day of the announcement. Recent trading volumes have been broadly in line with the four-week average, indicating steady investor interest.

While the stock has experienced a modest pullback over the past month, longer-term performance remains strong. Over the past year, SKS shares have gained approximately 86.7 percent, significantly outperforming both the ASX 200 and the broader Industrials sector.

Analyst sentiment remains cautious but constructive, with recent coverage indicating a Hold rating and a price target around $4.00. This suggests the market views the stock as fairly valued following its strong run, with future upside dependent on execution.

Growth Outlook and Investment Considerations

The acquisition of Delta Elcom reinforces SKS’s exposure to data centre infrastructure, a segment supported by long-term structural tailwinds. However, execution risk remains a key consideration, particularly around integration, labour availability, and margin sustainability.

Investors will be watching for early signs that Delta Elcom is contributing positively to earnings and that cross-selling opportunities are being realised. Working capital requirements and cost control will also be important as SKS scales its operations.

For income-focused investors, the company’s dividend provides an additional layer of appeal. For growth-oriented investors, SKS offers leveraged exposure to digital infrastructure and mission-critical construction activity.

Written By: Lydia Kelly

Published: 13th January 2026