Emeco’s tour de Force

The Australian Mining Review - - NEWS: THE CONTRACTORS - CAMERON DRUM­MOND NA­TIONAL

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 said.

Emeco has ex­panded its business at a crit­i­cal time in the mar­ket.

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