Neles has signed an asset purchase agreement to acquire the valve and pump businesses of the Finland-based technology company Flowrox. The acquisition will complement Neles’ offering and exposure to the mining and metals industry.
The mining and metals market is expected to have strong short- and mid-term growth for the next decade, driven by the increasing demand for metals, ore depletion and underlying investments into more efficient processing. With good long-term fundamentals, service intensity and a different cyclical nature balancing out cycles from currently served industries, mining and metals is an attractive industry for Neles. The acquisition will enable Neles to better leverage growth opportunities in minerals processing applications.
“Diversification of our customer industries is a key component of Neles’ growth strategy. This acquisition is an excellent fit for Neles as Flowrox is a well-known niche player in flow control within mining and metals and it has the right offering and very strong competence and know-how,” says Olli Isotalo, President and CEO, Neles. “Going forward, we plan to continue developing the transferring businesses as a platform for growth in a strategic focus industry.”
The purchase price of the valve and pumps businesses is EUR 40.9 million, payable in cash at closing, with an additional orders received-based earn-out consideration of up to EUR 3 million for a one-year period after closing, also payable in cash. The transaction is expected to be positive for Neles’ earnings per share already in 2022. The closing of the acquisition is estimated to take place in November 2021.
Courtesy of Neles.