Australian-based Austin Engineering has inked a binding agreement to acquire fellow Australian company and equipment manufacturer Mainetec in a deal initially worth A$19.6 million.
Under the deal’s terms, Austin will gain access to Maintec’s Hulk range of mining buckets and boost its customer base in its market areas. Additionally, Austin will offer Maintec’s dipper buckets to global markets, North and South America particularly, where there are regions of high demand.
The Hulk buckets, Austin said, are a complement to its recently launched JEC range of buckets. This will have the benefit of increasing the company’s market share in Australia, especially in areas where Mainetec has an existing presence.
Financially, Austin will acquire Mainetec less its net debt of approximately $1.5 million. The agreement includes a mechanism under which, subject to completion, Austin will have economic exposure to the Mainetec business from 19 August.
The acquisition costs will be paid in cash in three installments spread over two years; the first of about $11.1 million will be due on completion followed by two more payments of $3.5 million each payable at the end of years one and two.