ENGINEER Fenner hit the acquisition trail again yesterday with the purchase of ACE, a privately owned group of Australian companies.
The Hessle-based conveyor belting giant said the ACE companies, which are based in Somersby in New South Wales, have gross assets of around £10.4m.
The transaction is expected to complete at the end of November.
Fenner said ACE specialises in supplying engineered conveyor solutions for the design, manufacture and installation of high capacity conveyor systems for both surface and underground mining.
It added that ACE has the capability to take projects from the initial concept to the commissioned conveyor system.
Fenner said the acquisition will further its Australian subsidiary’s strategy of being the supplier of choice for engineered conveyor solutions in Australia, offering mining customers integrated solutions for improving the safety and total cost of materials handling.
Fenner’s chief executive Nicholas Hobson said: “We are passionate about making conveying safe, more reliable and cost effective. This is a significant development for the Fenner Dunlop Engineered Conveyor Solutions offering in Australia, through which we are growing by strengthening our capabilities to effectively manage the lifetime cost of our customers’ conveyors throughout the business cycle.
“This acquisition consolidates Fenner Dunlop’s position as the leading supplier of conveyor products and services to the Australian markets and complements the acquisition in North America of the Allison Custom Fabrication business.”
The group has been on a spending spree recently and bought three small companies in August: Scandinavian hose firm Mandals, oil and gas components firm Norwegian Seals and US plastics firm American Industrial Plastics.
The group said the fundamentals of its core markets remain strong. Strong cash flows in the final quarter resulted in year end net borrowings of less than £100m, giving the group the opportunity to buy more bolt-on acquisitions.
Fenner is predicting substantial growth in revenues and profits despite a slowdown in US coal demand.
The company, which makes conveyor belts mainly used in mining, has seen some slowing of order rates from the US coal market as customers match output with consumption.
This was in the wake of an exceptionally mild winter and “uneconomic” shale gas pricing.
The group said the European and Southern Hemisphere operations of its engineered conveyor solutions division have performed strongly.
It said the slowdown in US demand has been reflected in activity levels, although US coal stockpiles have been decreasing from historic highs for several months.