The Weir Group PLC ("Weir") has agreed to acquire Delta Industrial Valves Inc. ("Delta" or "the Company"), a leading US-based manufacturer of knife gate valves for the mining, oil sands and other industrial markets, for an enterprise value of up to US$47 million. Based in Niles, Michigan, Delta employs approximately 70 people and generated EBITDA of approximately US$6.2 million over the last twelve months.
Initial consideration of US$37 million will be payable on completion of the acquisition, US$21m in cash (funded from existing bank facilities) and US$16m in new equity , enabling the owners of Delta to share in the future benefits of the combination. Up to a further US$10m in cash will be paid over the next 18 months, contingent upon the business meeting certain profit growth targets.
The acquisition extends Weir Minerals’ leading presence in mining and oil sands markets by expanding the division’s portfolio of valve products, particularly knife-gate valves, for use in the transportation of slurry. The transaction will be immediately earnings accretive, and post-tax returns (before integration costs) are anticipated to exceed Weir’s cost of capital in the first full year of ownership. Completion of the acquisition is expected to occur within the next few days.
Keith Cochrane, Chief Executive of the Weir Group, said:
“Weir is a global leader in process critical products in the mining and oil sands markets and the acquisition of Delta further strengthens our comprehensive offering to customers. Delta’s strong brand and reputation, together with Weir’s global capability, mean we will be able to offer our customers new ways to increase efficiency at a time when the industry is focused on reducing costs and increasing productivity.”
Mark Johnson, Vice-President of Delta, said:
“We are delighted that Delta will be joining one of the world’s leading engineering businesses. Delta will be able to take advantage of Weir’s presence in more than 70 countries, bringing our valves technology to customers all over the world. We see significant opportunities ahead in what remain long-term growth markets."
About The Weir Group PLC
Founded in 1871, The Weir Group PLC is based in Glasgow, Scotland and is one of the world’s leading engineering businesses. Weir designs, manufactures and services innovative solutions which make our minerals, oil and gas and power customers more efficient. This is recognised in the global leadership positions we have developed in our core markets.
The Group aims to be a partner of choice to our customers 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 2014, of which almost two thirds came from the provision of services and aftermarket support.
About Delta Industrial Valves Inc.
Founded in 1987, Delta manufactures a range of ASME class 150, 300 and 600 knife gate valves for the mining, oil sands and other industrial markets in North America, with a growing international presence. Delta’s products are capable of cutting, shearing, and closing against solids while still producing a zero leakage tight shut-off, and include the world’s only Safety Integrity Level certified knife gate valve series.
Delta operates from an 82,000 square foot facility in Niles, Michigan.
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