Emeco has expanded its business at a critical time in the market. Image: Emeco.
BY CAMERON DRUMMOND
MINING equipment supplier Emeco Holdings will expand its market share with the $69.8 million purchase of national supplier and maintenance provider Force Equipment.
The acquisition will provide Emeco with a further 179 high-quality and low-hour machines, taking its fleet total to 897, and doubling its WA presence.
The transaction price is about 2.96 Force’s FY17 EBITDA of $23.6m, with Emeco funding the purchase via an $80m equity raising.
Emeco managing director Ian Testrow said the buyout of Force was a part of the company’s strategy to becoming a world leading provider of equipment rental.
“The acquisition of a market leading business like Force will allow Emeco to grow our rental business in key markets, enhance all important maintenance capabilities and diversify our customer exposure, including in the iron ore market in WA through its workshop in the Pilbara,” Mr Testrow said.
“Force’s component rebuild capability will also mitigate risk of component supply disruption at a critical time in the market.”
Mr Testrow said Emeco would welcome Force’s 200 employees at supply bases in Perth, Kalgoorlie, Port Hedland and Mackay to stay on, and looked forward to working with Force’s management team to realise the company’s growth strategy.
“Management’s focus for FY18 continues to remain on ensuring the health and safety of Emeco’s employees, maximising return on capital, disciplined cost management, reducing our debt and exploring additional strategic consolidation opportunities to grow the business,” Mr Testrow concluded.