Metal basher and rail products maker, Bradken Ltd, has revealed an acquisition in Canada, lifted 2010 guidance and a $50 million share placement.
The deal was announced in a statement to the ASX yesterday.
The company said it will buy Canada’s Almac Machine Works for $C47.5 million. Almac provides machinery, parts and assemblies to the resources sector.
"In addition, a maximum earn-out of C$4.8 million ($5.2 million) is payable subject to CY10 performance of the Almac business," the company said yesterday.
"Almac is expected to report normalised revenue of C$51 million ($55 million) and normalised EBITDA of C$12.4 million ($13.3 million) for the year ending 31 December, 2010.
"The acquisition is expected to be approximately 3% EPS accretive to Bradken in the first full financial year following completion of the acquisition and the share placement."
An underwritten institutional placement of ordinary shares will raise $50 million, with the proceeds to fund the acquisition and/or reduce Bradken’s debt, it said.
Bradken shares have been placed in a trading halt and they last traded at $7.25.
The company provides parts, equipment and services to the mining, minerals processing, rail, industrial, power and cement industries across Australia, New Zealand and North America.
It said it was upgrading its 2010 outlook as well.
"Bradken upgrades guidance provided at the AGM in October 2009 and in the 1H10 Interim Results in February 2010, with FY10 EBITDA now expected to be in line with, instead of slightly below, FY09 EBITDA.
"The Rail division is expected to deliver a strong performance through continued productivity improvements at the Xuzhou operations as well as ongoing purchasing gains.
"All other divisions continue to improve in line with expectations.
"Bradken remains comfortable with the outlook for the core Bradken business, with signs of recovery in the US based Engineered Products division. Almac is expected to continue to grow organically.
"Following the acquisition and equity raising, Bradken will continue to be well placed to capitalise on future growth opportunities," the company said.
