PERTH (miningweekly.com) – Global engineering firm Austin Engineering has struck a A$19.6-million agreement to acquire Australian mining equipment manufacturer Mainetec.
ASX-listed Austin said that the acquisition would give the company access to Mainetec's Hulk range of high-performance mining buckets, increasing the potential customer base in all of Austin’s markets.
The Hulk buckets complement Austin’s recently-launched JEC bucket range and the dual product offering will increase Austin’s bucket market share in Australia, especially on the East Coast where Mainetec has a well-established presence.
Austin also plans to offer Mainetec's high value dipper buckets into its global markets, particularly North and South America, where there is high demand and a large dipper bucket market.
“The key benefits of this acquisition for Austin are the ability to expand our mining bucket offering in Australia and then to offer that into our other markets around the world. Mainetec is a technology led business that has developed the Hulk range of buckets suited to demanding applications and has also become a key supplier in Australia for dipper buckets used on rope shovels. Dipper buckets are typically the largest used in the industry and we will be able to introduce these upgrades through our operations in the much larger Americas markets. Mainetec’s presence on the East Coast of Australia will also support our re-energised activity in that region,” said Austin CEO and MD David Singleton.
“The acquisition has clear synergies for both companies. Mainetec complements our core business offering and Austin is able to integrate more competitive supply chain economics and cost synergies into the Mainetec business.
“Additionally, in Mainetec we gain a very talented team as well as some leading design IP. I am pleased to welcome the founders of Mainetec and their workforce to Austin, with the determination that Austin will assist them to continue product development that will enable further growth and success in Australia and beyond.”
Under the terms of the agreement, Austin will acquire Mainetec for A$19.6-million, less some A$1.5-million of net debt. The initial cash consideration would be paid in three tranches over two years, with the first A$11.1-million due on completion of the transaction, and the next two equal instalments of A$3.5-million each payable at the end of years one and two.
Austin told shareholders that the initial payment would be partly funded through a proposed A$11-million, three-year fully amortising debt facility from HSBC, with the remaining payments to be made from cashflow.