Weir Group has swooped on Ontario-based Carriere Industrial Supply Limited (CIS), which it describes as a premier manufacturer and distributor of highly engineered wear parts and aftermarket service provider. The move follows its purchase announced last year of buy Canadian mining technology business Motion Metrics for £89m.
Regarding the latest transaction, the London-listed Scottish firm said CIS’ products include mining buckets and lip systems, and help customers increase productivity through reduced downtime and improved safety.
It also pointed out that the enterprise value for the completed transaction was £20m, subject to customary working capital and net debt adjustments, with consideration paid in cash at closing, and the deal set to be earnings and margin accretive in year one with returns expected to exceed Weir’s cost of capital in the first full year of ownership.
CIS follows in Motion Metrics’ footsteps by joining Weir’s Esco division, created when it snapped up US-based surface mining ground engaging tools specialist Esco Corporation in 2018.
Weir explained that the latest deal builds on a long relationship with CIS acting as Esco distributor in Eastern Canada for many years, and delivers on Esco’s strategy to have direct sales channels in major mining markets, as well as increasing the division’s capability in underground hard rock mining applications.
The deal brings about “attractive” commodity exposure, with CIS having a “strong” presence on gold mines and is located near deposits of nickel and lithium, Weir added.
Andrew Neilson, president of Weir’s Esco arm, said: “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.”
The news comes after Weir last month published its results for the year to the end of December, showing that revenues nudged up 2 per cent year on year, on a constant currency basis, to £1.93 billion, while adjusted operating profits were 5 per cent higher at £296m on the same measure.
The firm, which dates back to 1871 and operates in 60-plus countries, also last month announced the full suspension of its business and operations in Russia.