Johns Lyng Group has acquired a Sydney-based strata management business for $2.7 million and has been contracted by the SA Government to manage the state’s flood recovery operations along the Murray River.

The listed building services provider says Advanced Community Management currently oversees 2262 lots across 74 schemes and is expected to be immediately earnings accretive.

“The acquisition of ACM is a continuation of our roll-up strategy in the strata segment,” Johns Lyng Group Australia CEO Nick Carnell said in a statement today.

“As we have previously advised, consolidation of this sector will generate outstanding returns for our shareholders as we continue to leverage economies-of-scale and cross sell our complementary services into this segment.”

The acquisition was made via subsidiary Bright & Duggan and funded from existing debt facilities and cash reserves.

Johns Lyng says under the contract with the SA Government, the business will coordinate and manage immediate risks to people and property, coordinate clean-up activities and dispose of flood debris.

The SA flood clean-up work adds to other similar contracts that the business has secured in Queensland, NSW and Victoria after floods and other weather-related events struck the states.

Johns Lyng says the initial $56 million body of work is funded jointly by the Commonwealth Government and the SA Government.

It has already mobilised teams and staff to the affected areas to commence the flood recovery effort.

The SA recovery work is being delivered by Johns Lyng Disaster Management Australia.

Johns Lyng has an extensive presence in the insurance industry, undertaking recovery works for customers of insurers including QBE, Allianz, Comminsure, IAG and RACQ.

Its Insurance Building and Restoration Services division – which accounts for 88% of revenue – is the bedrock of the business. The division booked revenue of $560.9 million in the December half, almost double that of $298 million from a year earlier.