Look for the ubiquitous General Electric (NYSE: GE) label on some more mining equipment, with GE announcing May 15 that it is pursuing acquisitions of two underground mining equipment manufacturers in support of the global expansion of its mining business.
GE has entered into an agreement to acquire 100% of Australia-based Industrea Ltd. (ASX: IDL, OTCQX: IULTY), a provider of safety and productivity-enhancing mining equipment and services. The transaction is valued at about A$700m.
GE also signed a binding letter of intent (LOI) to acquire Fairchild International, an independently-owned and operated underground mining equipment manufacturer located in Glen Lyn, Va. Terms of the agreement were not disclosed.
“The combination of the two entities expands GE’s product offering to address approximately 35% of the underground mining value chain,” said GE. “Industrea Ltd. and Fairchild International together are well positioned in dynamic growth regions for mining, including Australia, China (Industrea), and the United States (Fairchild). GE will enable these regionally focused enterprises to reach a global customer base with enhanced products based on GE’s clean propulsion systems, energy storage offering, and world-class system integration capabilities.”
Both companies will become part of GE Transportation’s global mining business. GE Transportation builds equipment that moves the rail, mining and marine industries. It is headquartered in Erie, Pa., and employs about 12,000 people worldwide.
Industrea has a big presence in Australia, Far East
With more than 700 employees, seven Australian locations, and a significant presence in China, Industrea is well positioned for growth across its four divisions: Mining Equipment (flame- and explosion-proof underground mining vehicles and equipment), Mining Technology (drill guidance systems and collision avoidance systems), Gas Management (specialized underground in-seam drilling and gas drainage services) and Mining Services (integrated contract mining services).
Lorenzo Simonelli, President and CEO of GE Transportation, said: “Industrea has built an attractive business supplying major mining companies in growth regions. The company has developed a solid record of helping customers increase production while continually implementing safety improvements. We believe that Industrea’s business can grow more rapidly by expanding its product suite and geographic reach combined with GE’s technical expertise and global customer relationships.”
Robin Levison, Managing Director and CEO of Industrea, said: “GE’s resources, technical expertise and global customer relationships are expected to accelerate the growth of Industrea’s businesses, building on the company’s strong reputation for products and services that enhance the safety and productivity of mining companies.”
Industrea shareholders will vote on the offer in the second half of 2012. The transaction is also subject to customary conditions including relevant regulatory approvals. The transaction is expected to close later in 2012.
Fairchild provides range of U.S. mining equipment
Fairchild employs about 150 people and manufactures a wide range of underground mining equipment, including diesel and battery-powered scoops, continuous miners, haulage systems, shield haulers and maintenance vehicles. With this acquisition, GE will expand its product offering to underground mining and grow Fairchild’s customer base beyond its core U.S. market to serve mining customers worldwide.
Fairchild has been serving the mining industry, including the coal industry, for over 47 years and manufactures the industry’s most complete line of AC VFD and DC battery-powered scoops along with permissible and non-permissible diesel-powered scoop and longwall shield haulers. Fairchild also manufactures a range of low-seam continuous miners and haulage systems, maintenance vehicles, maintenance centers and cargo carriers. The company has warehouses and service centers in Beckley, W.Va.; DuQuoin, Ill.; Huntington, Utah; Indiana, Pa.; and Pikeville, Ky.
Myrleen Fairchild, President of Fairchild International, said: “I want to thank all our customers and suppliers for their trust and support over the past decades. I’m confident that our people and products will continue to flourish under the leadership of GE for the benefit of our customers.”
The transaction, terms of which weren’t disclosed, is expected to close in the third quarter of 2012.