The Weir Group completed the acquisition of Carriere Industrial Supply (CIS), a leading manufacturer and distributor of highly engineered wear parts as well as an aftermarket service provider to the Canadian mining market for £20m on Monday.
Mining buckets and lip systems are among the company’s products, which assist customers to boost productivity by reducing downtime and improving safety.
The transaction had an enterprise value of £20m, after working capital and net debt adjustments, which were paid in cash at the closing of the deal.
Through this deal, Weir Group will be able to expand on a strong partnership with CIS, which has served as ESCO’s Eastern Canadian distributor for many years.
ESCO’s aim of having direct sales channels in major mining markets is attained and its capability in underground hard rock mining applications has increased through this purchase.
CIS has a large presence in gold mines and is adjacent to nickel and lithium reserves, giving it an appealing commodity exposure.
CIS is now a part of the ESCO Division and in the first full year of ownership, the transaction is expected to be profits and margin accretive, with returns expected to exceed the group’s cost of capital.
“The acquisition of CIS aligns with our strategy of providing direct sales and service to our mining customers and builds on our longstanding partnership, while also enhancing our capabilities in underground hard rock mining applications,” said Andrew Neilson, President of Weir’s ESCO Division.
Weir Group shares lost 1.45% to 1,568p in early morning trade on Monday.