The Weir Group PLC has acquired Trio Engineered Products, a Chinese-American manufacturer of crushing and separation equipment for the mining and aggregates markets, for an enterprise value of US$220 million.
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$10 million over a two-year period.
Weir is a global market leader in the provision of pumping equipment to the mining mill circuit, which separates rock from ore. 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 to:
- Accelerate Trio’s original equipment revenue growth; and
- Capture a greater proportion of the aftermarket opportunity from the installed base of Trio equipment. Trio has limited service presence outside of China.
- 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).
Keith Cochrane, Chief Executive of the Weir Group, said: “This agreement will allow Weir Minerals to build upon its successful comminution strategy.”
“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.”
Mike Burke, Chief Executive of Trio, said: “This agreement is strategically compelling for Trio, allowing the company to leverage Weir’s market-leading service centre network to accelerate growth and better serve our customers’ aftermarket needs on a truly global basis.”