Metso to acquire McCloskey International
Metso to accelerate growth in aggregates with acquisition of Canadian crushing and screening equipment manufacturer
METSO have signed an agreement to acquire McCloskey International, the Canadian mobile crushing and screening equipment manufacturers, to expand their offering in the aggregates industry globally and to strengthen their customer reach, especially to the general contractor market.
With the mobile aggregates equipment market expected to grow by 4–6% annually during 2019–2023, Metso say the acquisition means they will be better positioned to take part in the growth of mobile products within the sector.
‘This acquisition is in line with Metso’s profitable growth strategy. It strengthens our aggregates business in key growth areas. The different cycles of aggregates balance our previously more mining focused Minerals portfolio well,’ said Pekka Vauramo, Metso’s president and chief executive officer.
‘Customers in aggregates and construction have varying business needs. This acquisition supports our expansion plans to approach customers through multiple complementary channels and offerings to meet their diverse needs,’ added Markku Simula, president of the Aggregates Equipment business area in Metso.
‘Going forward, Metso plan 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,’ he continued.
In the 12-month period ending 30 September 2018, McCloskey had pro-forma sales of C$464 million (€308 million) and a pro-forma EBITDA margin of 10.3%. The company’s track record of profitable growth over the past several years is expected to continue in 2019, with sales in the fiscal year ending 30 September 2019 expected to exceed C$500 million (€330 million).
Paschal McCloskey, founder, president and chief executive officer of McCloskey, said: ‘We are proud of the growth achieved in a competitive market. 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 even better solutions for our customers.’
The enterprise value of the transaction is C$420 million (€279 million) payable at closing with an additional profitability-based earn-out consideration of up to C$35 million (€23 million) for the two-year period after closing. McCloskey, who have approximately 900 employees in Canada, the US and Northern Ireland, will be reported in Metso’s Minerals segment.
The acquisition, which is subject to customary closing conditions, including anti-trust approvals, is expected to be completed during the fourth quarter of 2019.