INDUSTREA BOARD GIVES $470M TAKEOVER BID THE NOD

Written on the 18 May 2012

INDUSTREA BOARD GIVES $470M TAKEOVER BID THE NOD

ASX-LISTED Industrea (IDL) today approved a $470 million takeover bid from the US-based General Electric Company (GE).

The Sinnamon Park-based mining product and service provider’s Board of directors has voted unanimously in favour of US-listed GE’s proposal.

“This is an attractive offer, which is at a significant premium to the current share price. The Industrea board believes the offer represents fair value,” says IDL chairman David Beddall.

“We recommend unanimously that shareholders vote in favour of the scheme, in the absence of a superior offer and subject to the independent expert concluding that the proposal is in the best interests of shareholders.”

The agreement involves GE’s acquisition of all IDL shares via a scheme of arrangement for $1.27 per unit. There will also be the separate sale of IDL’s mining services business, promising investors a share in net proceeds on top of the existing $470 million sum.

“GE’s capital, technical expertise and global customer relationships are expected to accelerate the growth of Industrea’s businesses, building on the company’s strong reputation for products and services that enhance the safety and productivity of mining companies,” says IDL CEO Robin Levison.

“New career opportunities will open up for our people and customers will be able to benefit from increased resources devoted to product development and innovation.”

IDL predicts a $40-45 million net profit after tax (NPAT) for the 2012 financial year. The estimate represents a maximum decrease of 19.75 per cent compared to the previous fiscal period’s $47.9 million NPAT.

This was despite expectations that FY12 revenue would rise by 9.2 per cent to $390 million compared to FY11’s $357 million turnover.

Earnings before interest, tax, depreciation and amortisation were also up slightly to $125-130 million compared to last year’s $123.5 million.

IDL reveals the performance of its mining equipment business was strong throughout fiscal 2012, with orders from both Australian and Chinese markets underpinning an improved result in the previous financial period.

The mining services company has separately grown with key contracts extended during the period and new equipment deployed.

However, IDL’s mining technology and gas management subsidiaries will not achieve positive revenue and earnings growth in FY12 due to delays, loss of contract and restructuring that affects both China and Australian sales.


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