Metso has signed an agreement to acquire McCloskey International, a Canadian mobile crushing and screening equipment manufacturer.
The acquisition, valued at more than $420 million, aims to expand Metso’s offering in the aggregates industry globally and to strengthen its customer reach especially to general contractor customers.
The mobile aggregate equipment market is expected to grow by 4 to 6 per cent annually leading up to 2023, driven by the underlying road construction investments. By acquiring McCloskey, Metso will be able to better take part in the attractive growth of mobile products within the aggregates industry.
“This acquisition is in line with Metso’s profitable growth strategy,” said Pekka Vauramo, Metso’s president and CEO. “It strengthens our aggregates business in key growth areas. The different cycles of aggregates balance our previously more mining focused Minerals portfolio well.”
The acquisition is expected to close during the fourth quarter of 2019.
Markku Simula, president of the aggregates equipment business area in Metso added 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”, Simula said. “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.”
In the 12-month period ending Sept. 30, 2018, McCloskey had sales of $464 million and a pro forma EBITDA margin of 10.3 per cent.
The company’s sales in the fiscal year ending Sept. 30, 2019, are expected to exceed $500 million. McCloskey has about 900 employees in Canada, the United States and Northern Ireland.
“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,” says Paschal McCloskey, founder, president and CEO of McCloskey.
The enterprise value of the transaction is $420 million, payable at closing with an additional profitability-based earn-out consideration of up to $35 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.
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McCloskey, based in Peterborough, Ontario, designs and manufactures innovative crushers, screeners, stacking conveyors and washing systems.
Since 1985, McCloskey International has provided equipment used across industries including aggregate, mining, construction and demolition, waste management and recycling, landscaping and composting.
During its expansion over the past year, McCloskey acquired Lippmann-Milwaukee in the third quarter of 2018. Lippmann is a manufacturer of aggregate crushing equipment for processing applications. Headquartered in Milwaukee, Wisconsin, USA Lippmann was established in 1923 and has dedicated itself to producing the highest quality crushing equipment on the market.