The Weir Group PLC : Acquisition The Weir Group PLC 20 February 2013 WEIR STRENGTHENS PRESENCE IN FAST GROWING MINING MARKETS Acquisition of the R Wales group of companies and Cheong foundry; agreement to acquire Xmeco foundry The Weir Group PLC ("Weir") has extended its leading presence and capabilities in global mining and oil sands markets with the acquisition of a leading Canadian based manufacturer of wear resistant linings. In addition, Weir's best cost supply chain strategy has been advanced with the acquisition of a Malaysian foundry and agreement to acquire a heavy bay foundry in South Africa. Both facilities are well placed to serve the fast growing mining markets of Africa and Asia-Pacific. The combined consideration for the three acquisitions will be £55m and funded from existing bank facilities. R Wales Weir has acquired the R Wales group of companies ("R Wales"), a Canadian based manufacturer of specialist rubber and wear resistant linings for the mining, minerals processing and oil sands industries. The acquisition, which was completed on 15 February 2013, is expected to be immediately earnings accretive with post tax returns expected to exceed Weir's cost of capital within the first full year of ownership. With Canadian facilities in British Columbia and Ontario and a US facility in Arizona, R Wales designs and manufactures rubber lining for pipes, tanks, chutes and hoses and specialises in custom rubber and urethane moulded products, including slurry pump wear parts and mill liners. In 2012, the Wales Group generated revenues in excess of C$30m. The acquisition extends Weir's aftermarket position in the production and servicing of a wide range of rubber lined wear components for the North American oil sands and mining sectors and complements the existing customer base and product portfolio. Foundry strategy developments Weir has also advanced its global foundry supply chain strategy, completing the acquisition of the business and assets of the Cheong foundry in Malaysia, on 6 February 2013. Based near Kuala Lumpur, the facility supplies castings to a number of industries, including mining and power. The acquisition enables Weir to add foundry capacity to serve the Asia-Pacific region with high quality products from a best cost sourcing region. In addition, agreement has been reached to acquire the plant, equipment and buildings of Xmeco Foundry Pty. Ltd, a specialist large casting foundry in Port Elizabeth, South Africa. Xmeco expands Weir's capacity and capability on the African continent, enabling the full product range to be locally produced. Subject to regulatory approval, completion is expected in May 2013. Weir Chief Executive, Keith Cochrane, said: "The R Wales Group and the Cheong and Xmeco foundries enhance the Group's presence in important growth markets. The Wales Group develops our leading aftermarket offering in the minerals and oil sands sectors, while the Cheong and Xmeco foundries expand our low cost capacity in the fast growing regions of Asia-Pacific and Africa, enabling us to deliver quality products more quickly to our customers." Contact details: The Weir Group PLC Andrew Neilson, Head of Corporate Affairs & Tel: + 44 141 308 3750 Strategy Jonathan Milne, Communications Manager Tel: + 44 141 308 3781/ + 44 7713 789536 The Maitland Consultancy: Peter Ogden Tel: + 44 207 379 5151 About Weir Minerals Weir Minerals is the global leader in the provision of slurry handling equipment and associated aftermarket support for abrasive high wear applications used in the mining and oil sands markets. The division's leadership position is reinforced by materials development carried out at research centres worldwide and a leading presence in key mining markets, with around 100 service facilities providing rapid customer support. The division achieved revenues of more than £1.3bn in 2011. About The Weir Group PLC Weir, a FTSE 100 company founded in 1871 and headquartered in Glasgow, Scotland, is a global provider of engineering solutions to the minerals, oil and gas and power sectors. Our commitment to engineering excellence, research and customer focus extends equipment wear life and operational capability in some of the world's most challenging environments. Weir is committed to going where our customers go, with a worldwide network of around 200 manufacturing facilities and service centres. The business has a presence in more than 70 countries, with over 14,000 staff around the world working in three divisions; Minerals, Oil & Gas and Power & Industrial. Weir's customer base includes the world's largest mining houses, major oil services businesses and nuclear and conventional power generation companies. Annual revenues were more than £2.2 billion in 2011, of which more than half came from the provision of services and aftermarket support. Emerging markets contributed around one third of overall Group revenues. See www.weir.co.uk for further information. ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: The Weir Group PLC via Thomson Reuters ONE HUG#1679453
The Weir Group PLC : Acquisition
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