Tag Archives: mining M&A

NRW Holdings to add further mining/metals EPC capabilities with Primero acquisition

Comminution of minerals, Metallurgy, Mineral processing, Mining mergers and acquisitions, Mining services, , , , , , , , , ,

NRW Holdings is in pole position to take over Primero Group following a cash and shares bid that values Primero at A$100 million ($74 million).

Primero Directors, who own around 30% of Primero’s equity, have unanimously recommended its shareholders accept the offer in the absence of a superior proposal coming forward.

The addition of Primero, NRW says, would provide significant engineering, procurement and construction (EPC) capability to NRW’s renamed “Minerals, Energy & Technologies” business pillar.

For Primero, meanwhile, it would deliver a “meaningful premium” to recent market trading levels and avoid the need for a potential significantly dilutive capital raising to fund working capital required to deliver its 2021/2022 financial year contracted order book, NRW said. Primero currently has a contracted order book for FY21 of circa-A$285 million and holds preferred EPC contractor status across multiple projects totalling circa-A$900 million.

Managing Director of NRW, Jules Pemberton, said: “The acquisition of Primero will provide NRW with the opportunity to expand its Minerals, Energy & Technologies specialised capability and to leverage the combined expertise of both companies to pursue new business initiatives across a large pipeline of opportunities.

“It builds on NRW’s recent acquisitions of DIAB Engineering and RCR Mining Technologies and represents a further diversification of our strategic platform to offer clients continuity of services across the whole lifecycle of resource projects – from early planning, design, development, construction to operations and maintenance. In addition, Primero is also well positioned to future-focused energy solutions, including lithium and hydrogen technologies.”

Primero Managing Director, Cameron Henry, added: “The combination of NRW’s diversified delivery model coupled with the Primero capabilities will provide our client base with a unique end to end delivery model that will differentiate within the current market and will rapidly accelerate Primero’s growth strategy.

“Our teams have been working well at multiple levels together over the past 12 months and have several projects currently approaching delivery stage that will showcase the model.”

Detailed information relating to the offer will be set out in the Bidder’s Statement and Target’s Statement, which are expected to be dispatched to Primero shareholders in late November and early December 2020, respectively, the companies noted.

Weir to sell Oil & Gas division to Caterpillar

Environmental, Mining mergers and acquisitions, Mining services, Sustainable mining, , , , ,

The Weir Group says it has entered into an agreement for the all-cash sale of its entire Oil & Gas division to Caterpillar Inc for an enterprise value of $405 million, subject to customary working capital and debt-like adjustments at closing.

This follows the announcement in February 2020 that Weir would seek to maximise value from its Oil & Gas division as it continued its strategic transformation into a premium mining technology pure play.

The agreement will see Weir generate net proceeds to reduce the group’s leverage, while the transaction facilitates a $70 million US cash tax benefit for Weir to be realised over the medium term, it said.

While the transaction is subject to Weir shareholder approval, the company is hoping for it be completed by the end of 2020, assuming normal regulatory clearances.

Selling the division to Cat will help Weir transition into a premium mining technology pure play “focused on attractive markets underpinned by global demographic trends, the transition to a low carbon society and adoption of new technologies in the mining industry”, it said.

It will also provide a “differentiated aftermarket, service and technology offering with proven earnings stability and strong cash generation through the cycle”.

The company’s strategic intent will now be to build on leading mission-critical positions in the mining supply chain from extraction to concentration and tailings management. It will be aided by a strengthened balance sheet to provide enhanced flexibility to invest in future growth opportunities, it said.

Jon Stanton, Weir Group Chief Executive Officer, said: “We are pleased to have reached this agreement that delivers a great home for the Oil & Gas division and maximises value for our stakeholders. Alongside the previous sale of the Flow Control division and the acquisition of ESCO, it is a major milestone in transforming the group into a focused, premium mining technology business.

“It means Weir is ideally positioned to benefit from long-term structural demographic trends and climate change actions, which will increase demand for essential metals that must also be produced more sustainably and efficiently. This will require the innovative engineering and close customer partnerships that define Weir, and it is why we are so excited about the future.”

Joe Creed, Vice President of Caterpillar’s Oil & Gas and Marine division, said: “Combining Weir Oil & Gas’s established pressure pumping and pressure control portfolio with Cat’s engines and transmissions enables us to create additional value for customers. This acquisition will expand our offerings to one of the broadest product lines in the well service industry.”

Alfa Laval targets industrial flow control market with Neles bid

Environmental, Metallurgy, Mineral processing, Mining consumables, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , ,

Less than two weeks into being a public entity, Neles has become the subject of a friendly takeover offer from Alfa Laval AB.

The two have entered into a combination agreement pursuant to which Alfa Laval will make a voluntary recommended public cash tender offer for all issued and outstanding shares in Neles that are not held by Neles or any of its subsidiaries, the two companies said.

The €11.50/share ($13/share) all-cash bid values Neles at around €1.7 billion, which is a 32.8% premium to the closing Neles share price on July 10.

Alfa Laval, a leading global provider of products and solutions based on its key technologies of heat transfer, separation and fluid handling, has identified the industrial flow control market as a key growth area, it said. The planned transaction enables it to considerably strengthen its presence in the large industrial flow control space where the company currently offers mainly energy efficiency solutions, they said.

“On the other hand, Alfa Laval believes there are several areas where being part of the Alfa Laval Group can make a significant contribution to the future development of Neles, such as leveraging Alfa Laval’s existing global platform,” it said.

Some of Alfa Laval’s products are used in the engineering sector, mining industry and refinery sector, treating wastewater and in creating a comfortable indoor climate.

Neles, which began trading on the Helsinki Stock Exchange on July 1 as part of Metso’s partial demerger and merger with Outotec, is a global leader in flow control solutions and services. The company’s valves and valve automation technologies are known for quality, reliability and highest safety, it says.

The members of the Board of Directors of Neles who participated in the decision-making process have unanimously decided to recommend the shareholders of Neles accept the tender offer, while Cevian Capital, which holds some 10.9% of the issued and outstanding shares in Neles, has on customary conditions irrevocably undertaken to accept the offer.

Alfa Laval will on or about August 13, 2020, publish a tender offer document with detailed information about the tender offer and information on how to accept it. The offer period is expected to commence on or about this date and to expire on or about October 22, 2020, unless the offer period is extended by Alfa Laval.

“Neles and Alfa Laval would create a larger and stronger global player in the flow control market,” they said. “As a combined company, Neles would become an integral part of Alfa Laval’s organisation structure while largely retaining its operational structure and strong identity within the Alfa Laval network.”

The combined company’s combined revenue for the 12 months ended March 31, 2020, was approximately SEK53.8 billion ($5.9 billion) and it had a combined total of some 20,300 employees globally on March 31, 2020.

“The transaction is expected to be earnings per share accretive for Alfa Laval beginning from the first year following the completion of the tender offer,” they said.

There are several areas where being part of the Alfa Laval Group can make a significant contribution to the future development of Neles, Alfa Laval says, with certain strategic opportunities including:

  • Leveraging Alfa Laval’s service network infrastructure of around 100 service centres globally;
  • Leveraging Alfa Laval’s automated warehouse presence in North America, Europe, and Asia in Neles’ global parts distribution. The set-up is well suited to Neles’ product range and can provide a world-class solution in the industrial flow market, it says; and
  • Acquisition growth: Alfa Laval has a long history of successful M&A transactions and the financial strength to support a meaningful acquisition program in the industrial flow market.

Commenting on the offer, Tom Erixon, President and CEO of Alfa Laval, said: “The proposed deal offers a strong industrial logic: our businesses complement each other well with very little overlapping operations. Alfa Laval has the resources to invest in and support the development of Neles for years to come, while our global service network offers Neles a ‘plug and play’-kind of platform. As an owner, Alfa Laval would be committed to the strategy and industrial plan of Neles while offering a powerful platform to enable future growth. The match is nearly perfect.”

Olli Isotalo, President and CEO of Neles, said: “We see this offer as clear evidence of the good, strong work done throughout the years. It means that Alfa Laval believes in and appreciates our strategy, products and, most of all, know-how of our people. We continue to be serving our customers and executing our strategy and are delighted to hear that Alfa Laval would support our endeavours.”

Downer suspends mining business review on market volatility

Mining equipment, Mining mergers and acquisitions, Mining services, , ,

Downer EDI Ltd says it will suspend the review process relating to its mining business due to the “extraordinary market volatility caused by the COVID-19 pandemic”.

The company announced back in August that it was undertaking a review of its portfolio and that its Mining business would be an important area of focus, explaining that the process would include evaluation of a potential sale.

Grant Fenn, Chief Executive Officer of Downer, said its Mining business was currently performing well.

“As we said when we announced the portfolio review, Downer’s Mining business is a leader in Australia with a proven track record and it is well positioned to build on its strong market position and pipeline of work,” he said.

Contract wins since the company announced the review process include a five-year contract extension at the Meandu coal mine in Queensland, circa-A$165 million ($102 million) in contracts from Alinta Energy related to the solar project at Fortescue Metals Group’s Chichester Hub iron ore operations in Western Australia, and a two-year extension at BHP Billiton Mitsubishi Alliance’s Goonyella Riverside coal mine in Queensland.

Perenti, which advised the ASX on February 5 that it “was considering a potential acquisition of Downer Mining”, also said it had “suspended participation in the sale process” conducted by Downer due to current market conditions.

REMA TIP TOP Australia builds up infrastructure capabilities

Bulk handling, Equipment maintenance, Mining mergers and acquisitions, Mining services, , , , ,

REMA TIP TOP Australia says it is extending its existing range of material processing, wear protection and surface protection capabilities with the addition of civil, structural steel, mechanical and piping entity Drew Project Services.

The new agreement bolsters REMA TIP TOP’s experience in the installation and maintenance of conveyor systems for Australia’s leading industrial companies, adding a new and unmatched capability to provide broader infrastructure services, it said.

Steve Hipwell, REMA TIP TOP’s National Projects and Tenders Manager, said: “We’ve long been recognised as a leading provider of products and services that help keep Australian industry on the move. From conveyor belt design, componentry and specialist repair services, we’ve been able to hone our skills over decades to become expert in the installation, maintenance and the replacement of conveyor belts globally.”

This new agreement with Drew Project Services extends the company’s capability to provide turnkey solutions for customers in civil and mechanical disciplines across both maintenance and project requirements, Hipwell explained. “These services include detailed design and fabrication, detailed earthworks, form work and steel fixing, concreting, project management and supervision, heavy construction, site installation and commissioning, specialised welding and cutting, crane operation and rigging, painting and blasting services,” he said.

“We’ve long spoken about our desire to provide total industrial solutions that are aligned to our customers’ operating challenges and the establishment of this new infrastructure capability is evidence of this commitment.”

The new partnership is in effect from January 1, 2020.

Perenti considering further Australia mining services consolidation

Mining mergers and acquisitions, Mining services, , , , ,

In response to media speculation, Perenti has confirmed it is “currently giving consideration” to the potential purchase of Downer EDI’s mining services division.

“The process is ongoing and Perenti would only put forward an offer to acquire the business if it were to align with its strategy and deliver value for the company’s shareholders,” it said.

Downer confirmed in November that it would be undertaking a portfolio review “to determine whether there are opportunities to enhance the alignment” of its portfolio, noting that an important area of focus for the review was the mining business.

Perenti, a global mining services firm, has expanded substantially in the past few years, acquiring Barminco in late 2018 to become Australia’s second-largest mining services company.

Barloworld makes plans to establish Eurasia equipment unit

Equipment maintenance, Mining equipment, Mining mergers and acquisitions, Mining services, , , , ,

Barloworld says its Mongolia subsidiary has entered into an agreement to acquire 100% of Wagner Asia Equipment and 49% of SGMS LLC to help establish a new Eurasia-focused equipment unit.

The Caterpillar dealer has agreed to pay $216.8 million as part of the transaction, which will see the remainder of SGMS continue to be held by Battur Battulga, a Mongolian citizen actively involved in managing SGMS, which, Barloworld says, supplies equipment, parts and services to a key customer.

Through Wagner International LLC and its subsidiaries, the Wagner family have been doing business in Mongolia for over 22 years and are a long-standing Caterpillar dealer in selected states in the US.

Wagner Asia Equipment is engaged in the business of selling and distributing construction equipment, mining equipment, power systems, and related goods and services in Mongolia, primarily under the Caterpillar brand, according to Barloworld. It recently presented four 55 t CAT773 E dump trucks to Ulz Group, a Mongolia-based company focused on mining, exploration and construction (ceremony pictured).

Barloworld, in a SENS release, said it had consistently stated its desire to allocate capital to opportunities that complement its competencies as part of its medium-term strategy.

“The group balance sheet is strong and this opportunity, adjacent to the current Russian operation, presents an attractive growth prospect within the Equipment division,” it said. “The Wagner Asia Equipment business will be combined with the current Barloworld Russian business unit into a newly formed Equipment Eurasia unit.”

The proposed transaction is subject to the following outstanding conditions:

  • The conclusion of various agreements with Caterpillar Inc (or an associated entity) in respect of the Caterpillar dealership in Mongolia;
  • The carve-out, exclusion or transfer of non-core assets, liabilities, agreements, customers and debtors held by Wagner Asia Equipment prior to completion of the proposed transaction;
  • Obtaining the consent and associated waiver of Battur Battulga to the proposed transaction and the entry into of a new shareholders’ agreement;
  • Obtaining the consent(s) and/or waiver(s) from certain third parties in respect of certain rights arising from the change of control contemplated by the proposed transaction; and
  • Gaining the necessary board approvals of the seller, the purchaser and Barloworld.

The proposed transaction is expected to complete on or about April 1, 2020, with a long stop date of October 1, 2020, Barloworld says.

Danfoss to acquire Eaton’s Hydraulics business

Equipment maintenance, Mining equipment, Mining maintenance, Mining mergers and acquisitions, Mining services, , , , , ,

Danfoss has entered into an agreement to acquire Eaton’s Hydraulics business, creating a “global leader in mobile and industrial hydraulics”, Kim Fausing, Danfoss’ President and CEO, says.

The company has agreed to pay $3.3 billion for the business, explaining that the acquisition is fully in line with Danfoss’ strategy to strengthen its core businesses and enhance customer value.

Fausing said the deal was a “once-in-a-lifetime opportunity” to combine the two companies’ largely complementary portfolios and geographic footprints.

“Eaton Hydraulics is a highly respected player in the global industry, recognised for its dedicated people and strong brands. By combining the knowledge and experience of the two businesses, our customers will benefit from unmatched expertise from a single partner,” he said.

“With this agreement, we continue to invest in our core hydraulics business and digital solutions to stay a strong technology partner.”

Craig Arnold, Eaton Chairman and CEO, said Eaton’s Hydraulics business will benefit greatly from being “part of a company that has hydraulics at its core”.

He added: “When complete, this deal will bring together two talented teams with deep hydraulics knowledge and expertise. And Eaton’s hydraulics team will be part of a company that is committed to becoming a global leader in mobile and industrial hydraulics. The combined business will also benefit customers and distributors by offering industry-leading technology and a much broader portfolio of hydraulic solutions.”

Danfoss says the two businesses are leaders in the industry and have many organisational similarities, including company culture and a focus on customers, R&D and quality. The combined business creates a broader presence across the world, while enabling Danfoss to enter the industrial hydraulics market served by Eaton Hydraulics, the company explained.

Eaton Hydraulics provides products for customers in markets such as agriculture, construction and industrial markets. It also supplies mining companies with harsh duty cycle component solutions and services.

The business will be transferred into the existing Danfoss business segment, Danfoss Power Solutions, adding around 11,000 employees and 2019 sales of $2.2 billion to the business segment, which will double the hydraulics business. Danfoss, today, has some 28,000 employees and 2019 sales of $7 billion. Accordingly, with this transaction, Danfoss will increase its size by one-third.

Eric Alström, President of Danfoss Power Solutions, said: “Hydraulics is our core, and we have for years strengthened our Power Solutions business through high customer focus, as well as through significant investments in technology leadership.

“I believe our customers will benefit from combining these two businesses into a full-line hydraulics player dedicated to innovation and with a broad offering of products, robust distribution channels and tremendous geographic reach.”

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year.

Envirosuite to acquire environmental monitoring solutions leader

Environmental, Mining mergers and acquisitions, Mining services, Sustainable mining, , ,

Envirosuite Ltd (EVS) says it has signed a binding agreement to acquire EMS Bruel & Kjaer Holdings, a global provider of continuous, unattended environmental monitoring solutions.

EVS says it sees significant opportunity for short-term cross-sell and up-sell opportunities across the respective industry sectors of EVS and EMS, including mining, Smart Cities, airports, waste and wastewater, construction and heavy industry sectors, and geographies in which the two businesses are currently active.

EMS’ solutions for mining include software as a service for demonstrating environmental compliance, vibration & noise monitoring terminals, noise loggers, blast overpressure microphones, site monitoring cameras, air quality monitors and noise mapping software.

The cash and shares transaction will see EVS purchase EMS on a cash-free, debt free basis, from its shareholder group, comprising the majority shareholders Macquarie Corporate Holdings and Spectris Group Holdings, as well as the EMS founders whose nominees hold a minority shareholding.

The combined group will have a highly complementary geographic fit, as outside of Australia EVS has established offices in Canada, Chile, Colombia, Spain and China, while EMS has offices in USA, Denmark, Spain and Taiwan, EVS said.

The vision is to become the leading global environmental technology platform for real-time decision making across the three major environmental domains – air, noise, and water, EVS said.

“With this acquisition, the combined group will provide leading solutions across air quality (including odour and dust), noise and vibration monitoring, and waste and wastewater. This will significantly build out the current platform offering,” the company said.

“For some time, the board has harboured a longer-term internal aspiration to achieve A$100 million ($68 million) in annual revenues with a strong annuity base, and it is the board’s view that this transaction brings that aspiration into the medium term.”

GR Engineering to grow Americas footprint with Hanlon Engineering buy

Mineral project development, Mining mergers and acquisitions, Mining services, , , , ,

GR Engineering Services has entered into an agreement to acquire Hanlon Engineering & Associates Inc as it looks to grow its existing footprint within the Americas.

Hanlon, based in Arizona, USA, is a multi-disciplinary engineering services firm that provides engineering, procurement and construction management services to the mining sector in North America. It was established in 1999 and employs around 40 people. Hanlon also has a satellite office in Elko, Nevada.

Among the list of mining companies Hanlon has carried out work for is Agnico Eagle Mines, Barrick Gold, BHP, Freeport McMoRan Hecla Mining and Newmont.

GR Engineering’s Managing Director, Geoff Jones, said the acquisition of Hanlon was aligned with GR Engineering’s growth strategy.

“We are pleased to be acquiring the Hanlon business,” Jones said. “Hanlon has a strong local brand with an excellent safety record and longstanding relationships with major mining clients. Hanlon has an experienced management team capable of taking advantage of the numerous growth opportunities that exist in the Americas.”

Based on Hanlon’s current workflow, identified growth prospects and GR Engineering’s existing pipeline of work in the Americas, GR Engineering anticipates the business will immediately contribute to GR Engineering’s revenue and become earnings per share accretive for the company in the financial year ending 30 June 2021.

The acquisition remains subject to the satisfaction of several conditions precedent customary for an agreement of this nature. It is anticipated that the acquisition will be completed by the end of February.