“NRW to acquire RCR Mining and RCR Heat Treatment
NRW Holdings Limited (ASX:NWH) is pleased to announce that it has entered into an agreement with the Administrators’ of RCR Tomlinson Limited “RCR” to acquire the assets of RCR Mining and RCR Heat Treatment.
The purchase consideration of $10 million will be funded from NRW’s existing cash reserves and the acquisition is anticipated to complete within the next two weeks.
RCR Mining and Heat Treatment form part of the original RCR Tomlinson business established over 100 years ago. Employing ~300 people with primary locations at Welshpool and the regional centre of Bunbury together with a facility in Victoria. RCR Mining, includes the Mining Technologies business which owns significant intellectual property across a range of products and processes and is recognised as a market leader by global resources clients.
The Mining Technologies business is a leading national and international original equipment manufacturer (OEM) and innovative materials handling designer with an extensive product range including apron and belt feeders, high capacity conveyors, slide gates, stackers, spreaders, fully track- mounted in-pit mining units, sizers, scrubbers and screening plants.
Both the Mining Technologies and Heat treatment businesses have a high proportion of their activity in equipment product support and maintenance (both on site and off site). The Heat Treatment business has facilities which are among the most comprehensively equipped in the region and include the largest stress relieving furnace in Australia.
Mining Technologies and Heat Treatment generated ~$110M of revenue in FY18 and have a track record of delivering positive earnings. The acquisition will be EPS accretive on a full year basis, excluding integration and other one-off costs.
The highly skilled and experienced management, design, manufacturing, service and maintenance teams will join NRW, providing important customer and supplier continuity.
Commenting on the transaction Jules Pemberton NRW’s Managing Director and Chief Executive Officer said “This acquisition will allow us to provide incremental services, in line with our strategic objectives to a number of core clients common to both NRW and the RCR businesses to be acquired.
In addition, the annuity style income from the maintenance activities of Mining Technologies and Heat Treatment will provide a platform to continue to build a broader service offering across an expanded resources and oil and gas client base.
The intention is to integrate the acquisition, including all 300 employees as quickly as possible with minimum disruption to clients”.
NRW Chief Financial Officer, Andrew Walsh, commented “Given my four years as CFO at RCR Tomlinson up to November 2013, I am very familiar with the Mining Technologies and Heat Treatment businesses and the long serving management team led by Ian Gibbs. This is a financially compelling acquisition with the businesses providing complementary services and delivering a diversified base of recurring maintenance and project revenue.”
This is very exciting news and $10million seems an absolute bargain when you see other businesses paying enormous amounts to expand .
I like that word ‘compelling’ very much when used by someone I have faith in (ie if they are compelled then it has to be an irresistible opportunity) Andrew Walsh is the best CFO in the business in my books - he had RCR going along beautifully until Dr Dagleish decided to bring in a less scrupulous mate, and he supported NRW through near death, through the Golding acquisition, through all its financial dealings since and he absolutely knows what he is doing.
If he has faith in the “long serving management team led by Ian Gibbs” I do too https://au.linkedin.com/in/ian-gibbs-4a533644. After 30 years in the industry I am sure he is ‘the best’ and that it is a real team that knows exactly what it is doing .
(they must be stoked to be coming over to NRW!)
Also at the AGM Jules reinforced that since Samsung there is NO decision that is taken lightly .
It would not surprise me if the company had been doing quiet due diligence on MTHT since RCR started to founder .
At initial glance also there is the exciting word ( yes another one) “maintenance”
“Both the Mining Technologies and Heat treatment businesses have a high proportion of their activity in equipment product support and maintenance....”
- from looking at a few other companies’ annual reports this is nowadays where a lot of bread and butter work comes from.
And best of all It is most likely a “future proof” addition to the NRW Holdings array of offerings?
(20min delay)
