METSO ACQUIRES MCCLOSKEY IN LANDMARK DEAL

June 25, 2019

Metso has signed a $CAD420 million ($AUD457 million) agreement to acquire McCloskey International in a deal designed to expand its product offering and client base.

Predicated on an increased global spend in road construction, Metso expects the mobile aggregate equipment market to grow by 4 to 6 per cent annually from 2019 to 2023.

“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,” Metso’s president and CEO Pekka Vauramo said.

“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,” Markku Simula, Metso’s president of the aggregates equipment business area, 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,” Simula said.

Strong performance

In the 12-month period ending 30 September, 2018, McCloskey had pro forma sales of $CAD464 million ($AUD503 million) and a pro forma EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 10.3 per cent.

The company’s strong track record of profitable growth over the past several years is expected to continue in 2019. McCloskey International’s sales in the fiscal year ending 30 September, 2019 are expected to exceed $CAD500 million ($AUD542 million).

McCloskey employs about 900 people 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,” Paschal McCloskey, the founder, president and CEO of McCloskey, said.

“The combination of our unique focus on products and people and Metso’s global resources will help create even better solutions for our customers.”

To ensure financing for the acquisition, Metso has agreed on a bilateral loan from Nordea Bank Abp. The loan has a maturity of two years and includes an option to extend the maturity by one year.

The acquisition is subject to customary closing conditions, including anti-trust approvals. Closing is expected to take place during Q4 of 2019.

Impact on Australian distributors

In Australia, three companies distribute McCloskey and Metso mobile plant and equipment.

The Australian dealers for McCloskey International are MSC Group (eastern states) and 888 Crushing & Screening Equipment (South Australia, Western Australia and the Northern Territory).

Tutt Bryant Equipment is the national distributor for the Metso range of mobile plant.

Kirwan Barr, the CEO of MSC Group, told Quarry that the Metso/McCloskey acquisition should be a positive outcome for the Australian quarrying industry, which is already spoiled for choice of quality mobile plant and equipment. McCloskey product, with the full resources of Metso behind it, would simply raise the bar again, he added. Barr also anticipated it would be “business as usual” for MSC Group for the remainder of this year and beyond.