Jun. 11, 2019 - Metso has signed an agreement to acquire McCloskey International, a Canadian mobile crushing and screening equipment manufacturer, to expand Metso’s offering in the aggregates industry globally, and to strengthen the customer reach, especially to general contractor customers.
The mobile aggregates equipment market is expected to grow by between 4% and 6% annually during 2019 – 2023, driven by the underlying road construction spend. With this acquisition, Metso will be able to better take part in the growth of mobile products within the aggregates industry.
In the 12 month period ending 30 September 2018, McCloskey had pro forma sales of CAN$464 million (€308 million) and a pro forma EBITDA margin of 10.3%. The company’s strong track record of profitable growth over the past several years is expected to continue in 2019. The company’s sales in the fiscal year ending 30 September 2019 are expected to exceed CAN$500 million (€330 million). McCloskey has approximately 900 employees in Canada, the US, and Northern Ireland.
The enterprise value of the transaction is CAN$420 million (€279 million), payable at closing with an additional profitability-based earn-out consideration of up to CAN$35 million (€23 million) for the two year period after closing. The transaction is expected to be positive for Metso’s earnings per share in 2020. McCloskey will be reported in Metso’s Minerals segment.
To ensure financing for the acquisition, Metso has agreed on a bilateral loan from Nordea Bank Abp. The loan has a maturity of two years and includes an option to extend the maturity by one year. The acquisition is subject to customary closing conditions, including anti-trust approvals. Closing is expected to take place during 4Q19.
“This acquisition is in line with Metso’s profitable growth strategy,” Pekka Vauramo, President and CEO of Metso. “The different cycles of aggregates balance our previously more mining-focused minerals portfolio well.”
“Customers in aggregates and construction have varying business needs,” said Markku Simula, President of the Aggregates Equipment business area in Metso. “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.”
“We are proud of the growth achieved in a competitive market,” said Paschal McCloskey, Founder, President, and CEO of McCloskey. “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 better solutions for our customers.”