The Weir Group PLC has agreed to acquire Delta Industrial Valves Inc. for an enterprise value of up to $47 million. Based in Niles, Mich., Delta employs approximately 70 people and generated EBITDA of approximately $6.2 million over the last 12 months. The company is a U.S.-based manufacturer of knife gate valves for the mining, oil sands and other industrial markets.
Initial consideration of $37 million will be payable on completion of the acquisition, $21 million in cash (funded from existing bank facilities) and $16 million in new equity, enabling the owners of Delta to share in the future benefits of the combination. Up to a further $10 million in cash will be paid over the next 18 months, contingent upon the business meeting certain profit growth targets.
The acquisition extends Weir Minerals’ 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.
Source: Weir Minerals
