Weir Group has acquired Delta Industrial Valves, a U.S.-based manufacturer of knife-gate valves for the mining, oil sands and other industrial markets, for a cost of up to $47 million. Based in Niles, Michigan, USA, Delta employs approximately 70 people and generated EBITDA of approximately $6.2 million over the last 12 months.
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 the 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. Weir said 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.
Weir Group is based in Glasgow, Scotland, and has a worldwide network of around 200 manufacturing facilities and service centers. It has a business presence in more than 70 countries, and 15,000 employees in three divisions: Minerals; Oil & Gas; and Power & Industrial. Annual revenues were above £2.4 billion in 2014, of which almost two-thirds came from the provision of services and aftermarket support.
Delta manufactures a range of ASME class 150, 300 and 600 knife-gate valves and has a growing international presence. The company said its 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-ft2 facility in Niles, Michigan.