Transfield Services (TSE) announced today that it has acquired a 50% stake in the Instrumentacion Y Servicios S.A. (Inser) for $16.25 million.
Inser, which is Chilean mining maintenance and capital works services company, will be operating as Inser Transfield Services S.A. upon completion of the acquisition and will have more than 1,200 technically-skilled employees
Transfield said the acquision and entry into Chile fits with the company's global growth strategy of expanding into new markets with favourable macro-economic conditions.
The company also said it would build on Inser's strong local presence by leveraging its core skills in asset, project and subcontractor management, to grow the existing business.
"We're partnering with a local company that has grown four-fold in as many years in a country averaging a five per cent GDP growth rate," said Transfield CEO Peter Watson.
"Chile's growth has been driven by investment in the mining and infrastructure-related industries, both industries in which Transfield Services has core skills.
"The mining sector represents 63% of Chile's export market and has the potential to grow as this industry expands to meet growing demand for iron, copper, gold, silver, zinc and lead."
The new Inser Transfield S.A. will have long-term contracts with clients including BHP Billiton, Codelco and Xstrata and offices in the Northern Chilean mining hubs of Antofagasto and Calama as well as the capital city, Santiago.
The current Inser shareholders will retain 50% ownership and the existing management team also will remain in place.
Completion of the acquisition is expected in February.
However, a nervous market did not appear impressed by the news, with shares in Transfield falling by 3.11% or 42 cents to $13.09 by 12:15PM AEST.
