Babylon Pumps Up with Blue Hire Buyout, Scales Up for Water Wars

In what Managing Director Michael Shelby dubs a “step-change” for Babylon Pump & Power (ASX: BPP), the Perth-based specialist is making waves again—this time acquiring Bunbury’s Blue Hire in a deal that expands its fleet, deepens its reach into regional WA, and boosts its credentials in the high-margin water services game.

The acquisition of Blue Hire, a dry hire outfit specialising in pumps, hydrotesting, and filtration solutions, builds on Babylon’s recent move for Matrix Hydro Services. With these twin deals set to close by 30 June, Babylon is shifting from niche player to a bona fide rental heavyweight in the resource services sector.

The headline figure? A tidy $18 million up front for Blue Hire—$16.35 million in cash and $1.65 million in shares—based on an EBITDA multiple of just 2.5x FY24 earnings. Deferred consideration could tack on another $6 to $8.2 million, depending on performance.

On a pro forma basis, Babylon’s FY24 group revenue—including Matrix and Blue Hire—would clock in around $54 million, with EBITDA projected at $14 million. That’s a substantial leap from Babylon’s FY24 standalone EBITDA of $6.1 million.

So what’s Babylon really buying?

Blue Hire brings over a decade of pump-hire pedigree, a 140-strong rental fleet, and a client roster with no overlap with Babylon’s own. From crane-mounted slurry solutions to hydrotesting HDPE pipelines, it’s a neat fit technically—and perhaps more importantly, commercially. With Blue Hire’s Byron Ynema staying on to manage the combined rental fleet, integration risk looks minimal.

“This milestone delivers the meaningful rental scale that we have been chasing,” Shelby said, adding that the deal enhances Babylon’s geographic reach and provides “a proven, profitable dry hire business to our platform”.

The market might also appreciate Babylon’s disciplined capital management. The acquisition is backed by a new NAB facility worth up to $21.2 million, replacing a smaller existing term loan. Meanwhile, a $3.5 million equity raise—structured as a seven-for-twenty accelerated entitlement offer priced at $0.004—keeps some skin in the game for existing shareholders.

Importantly, the shares issued to Blue Hire’s vendors will be escrowed for two years—a sign they’re not just passing the baton, but betting on the race ahead.

And the strategy? Babylon isn’t just collecting assets. It’s curating a vertically integrated service platform spanning power, pumping, diagnostics, and long-term water management. With footprints in Mackay, Perth, Boddington, and now Bunbury, the company is gearing up to offer full-spectrum solutions to Tier 1 miners and regional contractors alike.

The transformation is perhaps best summed up in Babylon’s own materials: “Dry hire meets technical premium.” That’s Blue Hire’s low-overhead rental model paired with Matrix’s water consultancy nous. Together, they offer Babylon margin accretion, client diversity, and cross-selling potential—all the ingredients for a scalable services platform in a sector increasingly conscious of water, energy, and efficiency.

With FY26 EBITDA now guided at $14 million and the matrix of acquisitions expected to double Babylon’s earnings profile, the board’s ambitions are anything but hydraulic.

For Babylon shareholders, the message is clear: buckle up for a new era of growth. As Shelby put it, “There has never been a better time to be a Babylon shareholder.” While forward-looking statements should always be taken with a pinch of salt, this one has the ballast to make a splash.