Service Stream Bets $975 Million on Programmed, Funded by a $475 Million Raising and More Debt

Service Stream has agreed to buy Programmed, a prominent facility management, asset management and infrastructure services provider across Australia and New Zealand, from Persol for $975 million, in a deal funded by a fully underwritten $475 million equity raising and more than a doubling of its debt facilities.

The deal

According to Service Stream’s announcement to the ASX on Monday 9 November:

• Price: $975 million, implying an enterprise value of $1.092 billion including $117 million of Programmed lease liabilities. The price may be reduced by up to $25 million if Programmed misses an EBITDA hurdle for the year to 31 March 2027.
• Multiple: 7.4 times last-twelve-months EBITDA to June 2026 before synergies, or 6.1 times after initial run-rate cost synergies of $30 million.
• Funding: a $219 million institutional placement, a $256 million 1-for-4.9 accelerated non-renounceable entitlement offer, $490 million drawn from debt facilities (increased from $395 million to $895 million) and $50 million of existing cash.
• Price of new shares: $2.03, a 7.7% discount to the last close of $2.20, according to a SureStone Capital summary. About 234 million new shares will be issued, equivalent to about 37.8% of existing shares.
• Timing: completion is expected on or around 1 March 2027, subject to ACCC approval and other customary conditions.

What Service Stream is buying

Established in 1951, Programmed provides asset maintenance, facility management and resourcing services to government and large asset owners across sectors including transport, water, education, social housing, health and justice. According to Service Stream, Programmed has about 5,000 active customers, about 6,600 employees and a pool of about 8,000 specialist contractors, and its Facility Management division had work in hand of about $3.8 billion as at May 2026, with a further $2.7 billion in extension options.

The pitch

Service Stream expects earnings-per-share accretion (on its adjusted EPS-A measure) of more than 20% on a pro forma FY27 basis including synergies, or mid-single digits before synergies. It says synergies are a management estimate, about half to be delivered within 18 months and all within 36 months, with one-off integration costs of about $35 million. The combined group’s FY26 pro forma revenue was about $6.16 billion.

Pro forma net debt is expected to be 2.2 times EBITDA at completion, falling to about 1.5 times within 24 months. To help pay down debt, Service Stream intends to hold its dividend per share in line with FY26 for up to 24 months.

“The acquisition of Programmed marks a significant and exciting milestone in Service Stream’s journey, bringing together two businesses with highly complementary capabilities and supporting significant and sustainable value creation in support of our clients and shareholders,” managing director Leigh Mackender said. He pointed to the approach that underpinned the company’s earlier acquisition of Lendlease Services.

Why it matters

The deal is a large bet on outsourced maintenance of essential infrastructure, a market supported by long-term government and corporate contracts. It also adds meaningful debt and dilution to Service Stream’s balance sheet, making integration and synergy delivery the key tests for the combined group.

Sources: Service Stream ASX announcement, “Acquisition of Programmed and launch of $475 million equity raising” (9 November 2026); SureStone Capital (9 November 2026).