Weir Minerals Acquires Trio Engineered Products

GLASGOW, Scotland (Oct. 15, 2014) – The Weir Group PLC has entered into an agreement to acquire Trio Engineered Products¹, a Chinese-American manufacturer of crushing and separation equipment for the mining and aggregates markets, for an enterprise value of $220 million². 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 $10 million over a two-year period. Weir provides pumping equipment to the mining mill circuit, which separates rock from ore. The acquisition of Trio will build upon Weir’s recent 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, utilize Weir Minerals’ global platform and relationships across mining markets, and cross-sell Weir’s product range in sand and aggregates markets through Trio’s sales channels in North America and China (sand and aggregate markets accounted for 56 percent of Trio revenues in 2013). Trio is based in Shanghai, China, where it has two manufacturing plants. The company also has facilities in the U.S. In 2013, 31 percent of revenues were generated in North America, primarily in the growing aggregates sector; 25 percent were in China, mainly serving the domestic mining industry; and the balance were broadly spread across Australia, South America, Africa and Europe. In 2014, Trio is expected to generate revenues of $120 million 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. Founded in 1998, Trio designs and manufactures a range of crushers, screens, feeders, washers and material-handling solutions for the aggregates and minerals markets. The Weir Group is a global engineering business that provides products and services to customers in the minerals, oil and gas, and power sectors. Notes: 1. Weir will acquire 100 percent of Trio Engineered Products (Hong Kong), limited for $133 million, with the balance of the consideration relating to the acquisition of 100 percent of Trio Engineered Products, Inc., of the U.S. 2. The consideration payable is $237.5 million inclusive of net cash balances held by Trio, these being $17.5 million as of Aug. 31. The consideration is subject to adjustment, with $14.7 million deferred for up to 18 months and payment conditional on the realization of certain working capital balances and the achievement of agreed management goals.