Scotland-based engineering company Weir Group has signed a binding agreement to acquire Esco, a US-based provider of Ground Engaging Tools (GET) for surface mining, for $1.05bn.
Esco’s ground engaging tools are expected to complement Weir’s portfolio of products and services used on mine sites to process materials extracted by Esco’s equipment.
Esco’s global business includes 10 manufacturing facilities, 6 foundries and 22 service and supply centres in 19 countries around the world. The company earns 52% of its total revenue from North American markets.
The Scottish firm said the combined entity will provide a range of premium brands focused on increasing productivity and reducing total cost of ownership for global mining customers.
Esco chairman and CEO Cal Collins said: “This merger is exciting for Esco. It combines two premium brands and positions us to better serve customers around the world. The merger of Esco into Weir is a great fit, both culturally and strategically.”
During 2018 period, Esco will operate as a standalone business as part of Weir. The firm will later be merged into Weir in 2019.
Esco’s headquarters in Portland, however, will continue to serve as a global center of excellence for Esco products, which will also continue to be marketed and sold under the Esco brand.
Weir CEO Jon Stanton said: “Together, Weir Minerals and Esco will create a unique customer proposition as the premium provider of mission critical surface mining solutions from extraction to concentration, built on proprietary technology, superior wear life and supported by an unrivalled service network.”
Upon completion of the deal, the combined business will have operations in over 70 countries and will have approximately 18,000 employees.
Esco’s GET comprise wear parts such as teeth, shrouds, adaptors, blades and locking systems, which are installed on the lip systems of mission critical mining equipment.
The transaction, which is expected to take place in the third quarter of 2018, is subject to customary regulatory approvals.
Founded in 1871 in Glasgow, Scotland, Weir is a key player in mining and upstream oil and gas with facilities in over 70 countries, employing nearly 15,000 people.