Weir Group PLC has entered into an agreement to acquire Trio Engineered Products, the Chinese-American manufacturer of crushing and separation equipment for the mining and aggregates markets, for an enterprise value of $220m. Weir will acquire 100% of Trio Engineered Products (Hong Kong) Ltd for $133 million with the balance of the consideration relating to the acquisition of 100% of Trio Engineered Products, Inc in the US. Founded in 1998, Trio designs and manufactures a range of crushers, screens, feeders, washers and material handling solutions for the aggregates and minerals markets.
Trio provides engineered solutions for heavy duty applications utilising its broad range of robust equipment and has developed a strong position in Chinese mining and US aggregates markets. The company employs around 700 people across its operations in China and the US, with revenues growing from $74 million in 2010 to $108 million in 2013.
Weir amongst other mining application areas is a global market leader in the provision of pumping equipment to the mining mill circuit, where rock is separated from ore. The acquisition of Trio will build upon Weir’s recent successful entry into the adjacent comminution segment of the mill circuit. “This agreement will allow Weir Minerals to build upon its successful comminution strategy,” Keith Cochrane, Chief Executive, Weir Group, says.
“We will 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.”
In addition, Weir Minerals’ global platform and relationships across mining markets will be utilised 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.
It will also allow for cross-selling of Weir’s product range in the sand and aggregates markets through Trio’s well established sales channels in North America and China. 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.”
The sand and aggregate markets accounted for 56% of Trio’s revenues in 2013. Trio is based in Shanghai, China, where it has two manufacturing plants. The company also has facilities in the US. In 2013, 31% of revenue was generated in North America, mainly in the growing aggregates sector, while 25% was derived from China, mainly serving the domestic mining industry. The balance was spread broadly across Australia, South America, Africa and Europe. In 2014, Trio is expected to generate revenues of $120 million, with operating profit margins broadly in-line with that of the Weir Minerals division.
Trio is being acquired from majority owner Navis Capital and the company’s management team. Trio’s three founders have agreed to remain with the company following acquisition. Completion of the acquisition is subject to the fulfillment of certain conditions and is anticipated to take place before the end of October 2014.
