SHAPE Expands Retail Fitout Platform Through APS Acquisition

About Shape Australia Corporation Ltd

Shape Australia Corporation Ltd (ASX: SHA) is a national fitout and construction services specialist delivering interior, new build and modular construction projects across commercial, defence, education, health, hotels and hospitality, and retail sectors. The business operates across Australian capital cities and key regional centres, supported by more than 850 professionals and a long track record in project delivery, client partnerships and construction services.

Acquisition strengthens retail capability

The acquisition of APS gives SHAPE a more complete retail fitout platform. APS was established in 1998 and specialises in the design, manufacture and delivery of shopfitting solutions for multi-site retailers across Australia. Its operating model covers the full shopfitting lifecycle, including in-house drafting, manufacturing, procurement, logistics, project management and installation coordination.

This matters because retail fitout work can be highly repeatable when customers are rolling out new stores, refurbishing existing locations or upgrading store formats across multiple sites. SHAPE already has exposure to retail through its existing operations and the recently acquired Arden Fitout and Maintenance business. Adding APS broadens that offering across flagship store delivery, national rollout programmes, upgrades, refurbishments and ongoing maintenance services.

The strategic value sits in both revenue diversification and capability depth. APS brings manufacturing-led delivery, long-standing customer relationships and experience in smaller, repeatable projects. Around 80 per cent of APS projects are worth less than $500,000, which points to a steady programme-based workflow rather than reliance on a small number of large projects.

Vertical integration improves delivery control

APS operates from a 5,000 square metre manufacturing facility in Melbourne, with meaningful spare capacity to support future growth. It also has more than 20 years of offshore procurement capability. These features give SHAPE more control across the delivery chain, from design and procurement through to manufacturing, supply and installation.

For a construction and fitout business, vertical integration can be strategically valuable. It can improve delivery certainty, support margin control and provide greater flexibility when clients require repeatable rollout programmes across multiple locations. It may also help SHAPE reduce reliance on external suppliers for certain project components over time.

The facility’s spare capacity is another positive. Rather than acquiring a business already at full operational stretch, SHAPE gains a platform that can potentially support higher volumes as more work is channelled through APS. Over time, the manufacturing and procurement capability may be used beyond retail and applied across SHAPE’s wider sector footprint.

Financial impact looks attractive

The transaction includes upfront consideration of $20.4 million, made up of $17.4 million in cash and $3.0 million in SHAPE shares. A further $9.0 million may be payable over two years through an earn-out linked to EBITDA performance for FY27 and FY28. The maximum total consideration is capped at $29.4 million.

On the upfront consideration, the acquisition price implies around 3.8 times future maintainable EBITDA of $5.3 million. That appears relatively disciplined, particularly given the expected EPS accretion and strategic benefits. APS delivered FY25 revenue of $32.5 million and is expected to enhance SHAPE’s margin profile.

The acquisition is expected to be earnings accretive in SHAPE’s first full year of ownership, with normalised EPS accretion of approximately 5–7 per cent. That is a clear financial positive, provided integration is managed well and APS continues to deliver against its earnings base.

The earn-out structure also helps align vendor outcomes with future business performance. Half of the contingent consideration will be paid in cash and half in SHAPE shares, subject to EBITDA hurdles. The scrip component of the upfront consideration will be escrowed for 12 months, adding alignment between the vendor and SHAPE shareholders.

Retail platform becomes more resilient

SHAPE’s retail offering becomes broader through the combination of SHAPE, APS and Arden. The group will now be better positioned to support clients across complex fitouts, national store rollouts, refurbishments and maintenance. This creates a more complete lifecycle proposition for retailers that need both project delivery and ongoing store support.

The repeatable nature of APS’ work is particularly important. Construction and fitout earnings can be cyclical when they depend heavily on large one-off projects. Programme-based retail work can provide a steadier pipeline if customer relationships are strong and national brands continue refreshing store networks.

APS also brings an established customer base with long-standing relationships across leading retail brands. That customer depth should support cross-selling opportunities, while SHAPE’s broader national footprint may help APS scale its offering further.

Integration and execution remain key

The experienced APS leadership team will continue managing day-to-day operations for at least two years after completion. That should support continuity with customers, staff and suppliers while reducing integration risk.

Completion remains subject to customary conditions, including ACCC merger clearance, change-of-control consent for leases material to APS, no material adverse change and required authorisations remaining in place. The parties currently expect completion around 1 July 2026.

The main execution task will be preserving APS’ customer relationships and operating culture while gradually leveraging SHAPE’s larger platform. There is also a need to ensure the manufacturing and procurement capability is scaled carefully, without disrupting delivery quality or margins.

Outlook

The acquisition gives SHAPE a stronger retail fitout platform, increased vertical integration and greater exposure to repeatable, programme-based work. The deal also appears financially attractive, with expected EPS accretion, margin enhancement and a disciplined upfront valuation based on maintainable EBITDA.

The main positives are APS’ established retail relationships, manufacturing capability, offshore procurement experience, spare capacity and fit with SHAPE’s existing retail and maintenance operations. The main risks are integration execution, customer retention, earn-out delivery, approval timing and maintaining margins as the business scales.

Overall, SHAPE appears to be using acquisition-led growth to deepen capability rather than simply add revenue. APS strengthens the company’s retail exposure, broadens its delivery chain and gives the group another platform for sustainable, repeatable growth.