The Weir Group PLC (“Weir” or the “Weir Group”) has entered into an agreement to acquire Trio Engineered Products (“Trio” or “the Company”), a Chinese-American manufacturer of crushing and separation equipment for the mining and aggregates markets, for an enterprise value of c.US$220m2 (£138m3). The acquisition will be funded from existing bank facilities and will be immediately earnings accretive with post tax returns (before integration costs) expected to exceed Weir’s cost of capital in the first full year of ownership. Integration costs are expected to total US$10m over a two-year period.
Weir is a global market leader in the provision of pumping equipment to the mining mill circuit, which separates rock from ore. The acquisition of Trio will build upon Weir’s recent successful entry into the adjacent comminution segment of the mill circuit. The acquisition enables Weir to:

• Provide a more complete product and service offering to existing mining customers;
• Leverage Trio’s cost effective manufacturing platform;
• Utilise Weir Minerals’ global platform and relationships across mining markets to:
  • accelerate Trio’s original equipment revenue growth;and
  • capture a greater proportion of the aftermarket opportunity from the installed base of Trio equipment. Trio has limited service presence outside of China.
• Cross-sell Weir’s product range in sand and aggregates markets through Trio’s well established sales channels in North America and China (sand and aggregate
  markets accounted for 56% of Trio revenues in 2013).
  Trio is based in Shanghai, China, where it has two manufacturing plants. The Company also has facilities in the USA. In 2013: 31% of revenues were generated in North America, primarily in the growing aggregates sector; 25% were in China, mainly serving the domestic mining industry; the balance were broadly spread across Australia, South America, Africa and Europe. In 2014, Trio is expected to generate revenues of c.US$120m with operating profit margins broadly in-line with Weir’s Minerals division.
  Trio is being acquired from majority owner Navis Capital and the Company’s management team. Trio’s three founders have agreed to remain with the Company following acquisition. Completion of the acquisition is subject to the fulfilment of certain conditions and is anticipated to take place before the end of October 2014.

Keith Cochrane, Chief Executive of the Weir Group, said:

“This agreement will allow Weir Minerals to build upon its successful comminution strategy. We’ll use our Group’s unrivalled global capability to promote Trio’s range of complementary products, extending our addressable market and offering our mining customers a wider range of highly engineered equipment and services. Trio’s established manufacturing capability and its scale and presence in aggregates markets also provides a further platform for growth.”

Mike Burke, Chief Executive of Trio, said:

“This agreement is strategically compelling for Trio, allowing the Company to leverage Weir’s market-leading service centre network to accelerate growth and better serve our customers’ aftermarket needs on a truly global basis.”

About Trio:

Founded in 1998, Trio designs and manufactures a range of crushers, screens, feeders, washers and material handling solutions for the aggregates and minerals markets. Trio provides engineered solutions for heavy duty applications utilising its broad range of robust equipment and has developed a strong position in Chinese mining and US aggregates markets. The company employs around 700 people across its operations in China and the United States with revenues growing from US$74m in 2010 to US$108m in 2013.

About Weir:

The Weir Group is one of the world’s leading engineering businesses. We are committed to creating innovative engineering solutions. We provide products and services to customers in the minerals, oil and gas and power sectors. Weir’s customer base includes the world’s largest mining houses, major oil services businesses and nuclear and conventional power generation companies.

Weir is a FTSE 100 company founded in 1871 and headquartered in Glasgow, Scotland. 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 15,000 people around the world working in three divisions: Minerals; Oil & Gas; and Power & Industrial. Annual revenues were more than £2.4 billion in 2013, of which almost two thirds came from the provision of services and aftermarket support.

See weir.co.uk for further information. Follow us on Twitter @WeirGroup.