Scottish company buys ESCOBy FROM STAFF REPORTS,
A Scotland-based company has entered into a binding agreement to acquire ESCO Corporation (“ESCO”), a US company based in Portland, Ore., for an equity value of $1.0 billion and an estimated enterprise value of $1.285 billion.
Weir Group PLC announced April 19 that the acquisition was approved by the Board of Directors of Weir and is not subject to Weir shareholder approval. The transaction is expected to complete in early third quarter of 2018.
ESCO is a global business with 10 manufacturing facilities, six foundries and 22 service and supply centers in 19 countries around the world, one of its factories in located in Newton.
Post-closing, Weir intends to run ESCO as a stand-alone business for the remainder of 2018. Cal Collins, current Chairman and CEO of ESCO, will step down from his role after closing, and join the Board of The Weir Group PLC as a Non-Executive Director.
ESCO will be led by Jon Owens, current President and Chief Operating Officer, and will retain the current ESCO leadership team and, sales and supply chain structures. During this integration period, additional work will be done to identify the optimal operating model for the Weir Minerals business and ESCO going forward.
The Weir strategy is to prioritize opportunities for growth in Minerals and Oil & Gas. This reflects supportive long-term fundamentals for these end markets and Weir’s core strengths in highly abrasive aftermarket-intensive applications that require comprehensive global support.
“Today we are announcing an important development of our portfolio as we focus on building on our core strengths in Minerals and Oil & Gas,” said Weir Group CEO Jon Stanton. “With ESCO we’ll be joined by a world-class team and add another leading global brand. Together, Weir Minerals and ESCO will create a unique customer proposition as the premium provider of mission critical surface mining solutions from extraction to concentration, built on proprietary technology, superior wear life and supported by an unrivalled service network.”
In the last three months, Weir has had extensive access to the ESCO leadership team, facilities and shareholders as part of a highly collaborative process. The equity consideration will enable ESCO shareholders to benefit from the success of the combined business, and the high quality and long-standing ESCO team will join Weir.
ESCO Chairman and CEO Cal Collins said: “The foundation of our business for more than 100 years has been delivering value-added proprietary solutions through a proud tradition of quality and customer-driven innovation. This merger is exciting for ESCO as it combines two premium brands and positions us to better serve our customers around the world. The merger of ESCO into Weir is also a great fit, both culturally and strategically.”