October 20, 2014 – The Weir Group PLC has entered into an
agreement to acquire Trio Engineered Products, a Chinese-American manufacturer
of crushing and separation equipment for the mining and aggregates markets, for
an enterprise value of $220 Million USD.
October 20, 2014 – The Weir Group PLC has entered into an
agreement to acquire Trio Engineered Products, a Chinese-American manufacturer
of crushing and separation equipment for the mining and aggregates markets, for
an enterprise value of $220 Million USD.
The acquisition will be funded from existing bank facilities
and will be immediately earnings accretive with post tax returns (before
integration costs) expected to exceed Weir’s cost of capital in the first full
year of ownership. Integration costs are expected to total US$10m over a
two-year period.
The acquisition of Trio will build upon Weir’s recent
successful entry into the adjacent comminution segment of the mill circuit. The
acquisition enables Weir to:
• Provide a more complete product and service offering to
existing mining customers;
• Leverage Trio’s cost effective manufacturing platform;
• Utilise Weir Minerals’ global platform and relationships
across mining markets
• Cross-sell Weir’s product range in sand and aggregates
markets through Trio’s well established sales channels in North America and
China (sand and aggregate markets accounted for 56% of Trio revenues in 2013).
"This agreement will allow Weir Minerals to build upon
its successful comminution strategy,” says Keith Cochrane, Chief Executive of
the Weir Group. “We’ll use our Group’s unrivalled global capability to promote
Trio’s range of complementary products, extending our addressable market and
offering our mining customers a wider range of highly engineered equipment and
services. Trio’s established manufacturing capability and its scale and
presence in aggregates markets also provides a further platform for
growth."
Trio is based in Shanghai, China, where it has two
manufacturing plants. The Company also has facilities in the USA. In 2013: 31%
of revenues were generated in North America, primarily in the growing
aggregates sector; 25% were in China, mainly serving the domestic mining
industry; the balance were broadly spread across Australia, South America,
Africa and Europe. In 2014, Trio is expected to generate revenues of $120
Million USD with operating profit margins broadly in-line with Weir’s Minerals
division.
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