Monday 17th Jun, 2019

Metso makes $454M acquisition

Dana Incorporated has completed its acquisition of SME Group which manufactures low voltage motors for materials handling and agriculture vehicles.

Metso has signed an agreement to acquire a Canadian mobile crushing and screening manufacturer for around $454 million.

The company, McCloskey International, was acquired in order to expand Metso’s offering in the aggregates industry and to strengthen its customer reach to general contractors.

Metso expects the mobile aggregate equipment market to grow by four to six per cent annually during 2019 to 2023, driven by road construction spending.

“This acquisition is in line with Metso’s profitable growth strategy. It strengthens our aggregates business in key growth areas. The different cycles of aggregates balance our previously more mining focused Minerals portfolio well,” Metso President and CEO Pekka Vauramo said.

Metso President of Aggregates Equipment Markku Simula said customers in aggregates and construction have varying business needs.

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“This acquisition supports our expansion plans to approach customers through multiple complementary channels and offerings to meet their diverse needs,” he said.

“Going forward, Metso plans to continue developing the McCloskey brands and distribution channels independent of the Metso channel.

“Synergies are apart from sourcing mainly revenue related, resulting from the wider offering available to both channels as well as additional crusher equipment, service and consumable sales.”

In the 12 months to September 30, 2018, McCloskey had proforma sales of around $502 million and a proforma earnings before interest, tax, depreciation and amortisation margin of 10.3 per cent. The company’s total sales have increased by around 20 to 25 per cent since September 30, 2018, due to growing volumes and seasonal effects of the summer construction demand.

McClosekey Founder and President Paschal McCloskey said the company is proud of the growth achieved in the competitive market.

“I know that joining Metso is the right move for all our customers, employees, dealers and business partners. The combination of our unique focus on products and people and Metso’s global resources will help create even better solutions for our customers,” he says.

The transaction is expected to be positive for Metso’s earnings per share in 2020.

The acquisition is subject to customary closing conditions and ant-trust approvals. It is expected to close during Q4 2019.