Weir Group to acquire Trio

THE Weir Group plc is to buy Trio Engineered Products, a Chinese-American manufacturer of crushing and separation equipment for the mining and aggregates markets, for $US220 million ($A251 million).

Lou Caruana

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 $10 million over a two-year period.

Weir provides pumping equipment to the mining mill circuit, which separates waste from ore. The acquisition of Trio will build upon Weir’s recent 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; and use Weir Minerals’ global platform and relationships across mining markets.

This will enable it 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.

Trio is based in Shanghai, China, where it has two manufacturing plants. The company also has facilities in the US.

In 2014, Trio is expected to generate revenues of $120 million with operating profit margins broadly in-line with Weir’s 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 fulfilment of certain conditions and is anticipated to take place before the end of October 2014.

Weir Group CEO Keith Cochrane said: “This agreement will allow Weir Minerals to build upon its successful comminution strategy. We’ll use our group’s 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.”

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