Fenner to buy Australian conveyor belt maintanence companies
ERJ staff report (DS)
London -- Fenner PLC has begun the process of acquiring two conveyor belt maintenance companies in Australia, Belle Banne (Victoria) Pty Ltd, Leading Edge Conveyor Solutions Pty Ltd and associated interests (together "BBV")
Belle Banne (Victoria) Pty Ltd is based in the State of Victoria, Australia and Leading Edge Conveyor Solutions Pty Ltd ("LECS") is based in the State of Queensland, Australia. Both companies are providers of conveyor maintenance services and products to the mining industry and materials handling industries.
BBV is to be acquired from its beneficial owners, Belle Banne (Victoria) Hybrid Trust and Leading Edge Conveyor Solutions Trust (together the "Trustees") who hold the BBV assets on behalf of family trusts created for the benefit of the current owners and members of their respective families.
The first step in the process is a joint venture and the companies have now exchanged contracts on this deal. This JV will lead to the acquisition of 100 percent of the business and assets of BBV over a maximum 6-year period. The total consideration including potential working capital adjustments is capped at AUD$63.95m (euro 46.4 million) based on profit growth.
The transaction and joint venture will be phased over 6 years with Fenner initially acquiring a controlling interest of 50.01 percent of the joint venture, business and assets on completion. Fenner would acquire the balance of the joint venture on the 6th anniversary of the effective date of Fenner acquiring an interest (or earlier by mutual agreement). Fenner has an irrevocable right to buy the company at the end of 6 years.
BBV earned profits before tax of AUD$6.6 million in the year ended 30 June 2010. The transaction is expected to be earnings enhancing immediately upon acquisition.
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Press release from Fenner
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