Established in 2010, Mainetec is headquartered in Mackay in Queensland and also has a manufacturing facility in Henderson in Perth, Western Australia.
Austin Engineering Limited (ASX: ANG, ‘Austin’ or ‘the Company’) is pleased to announce it has entered into a binding agreement to acquire Australian mining equipment manufacturer, Mainetec Pty Ltd, (‘Mainetec’) for an initial amount of $19.6 million (‘the Acquisition’), funded through cash reserves and debt.
Three further earn-out payments (described below) will be made if Mainetec achieves agreed performance hurdles in the three years following completion.
The Acquisition will give Austin access to Mainetec’s Hulk range of high performance mining buckets, increasing the potential customer base in all of Austin’s markets. The Hulk buckets complement Austin’s recently-launched JEC bucket range and the dual product offering will increase Austin’s bucket market share in Australia, especially on the East Coast where Mainetec has a well-established presence.
Austin also plans to offer Mainetec’s high value dipper buckets into its global markets, particularly North and South America, where there is high demand and a large dipper bucket market.
Mainetec is a leader in the design and manufacture of high performance, customised excavator mining buckets and currently supplies several blue chip mining companies. It builds and upgrades dipper buckets, and supplies the majority of dipper bucket systems in Australia. It also manufactures rope shovels, and offers bucket repairs and spare parts.
Mainetec is expected to have revenue of more than $40 million (on an annualised basis) for the 2023 financial year. The Acquisition is expected to deliver significant synergies through the lower supply chain costs Austin is able to provide, and optimised operating costs.
The transaction is expected to be >20% accretive to Austin’s FY23 forecast broker consensus-based EPS, including synergies (or >10% excluding synergies) in each case on a full year basis.
Austin CEO and Managing Director, David Singleton said: “The key benefits of this acquisition for Austin are the ability to expand our mining bucket offering in Australia
and then to offer that into our other markets around the world. Mainetec is a technology led business that has developed the Hulk range of buckets suited to demanding applications and has also become a key supplier in Australia for dipper buckets used on rope shovels. Dipper buckets are typically the largest used
in the industry and we will be able to introduce these upgrades through our operations in the much larger Americas markets. Mainetec’s presence on the East Coast of Australia will also support our re-energised activity in that region.
“The acquisition has clear synergies for both companies. Mainetec complements our core business offering and Austin is able to integrate more competitive supply chain economics and cost synergies into the Mainetec business.
“Additionally, in Mainetec we gain a very talented team as well as some leading design IP. I am pleased to welcome the founders of Mainetec and their workforce to Austin, with the determination that Austin will assist them to continue product development that will enable further growth and success in Australia and beyond.”
Source: Company Press Release