Bis Industries has moved into vehicle manufacturing with the purchase of specialist mining-truck maker
November 26, 2013
Bulk haulage and mining logistics firm Bis Industries has moved into vehicle manufacturing with the purchase of specialist Australian truck and trailer-maker Powertrans.
The move comes as Bis joins McAleese Transport in gearing up for a stock-market float.
Powertrans is the key supplier of the dual powered road trains (DPRT) that Bis uses for off-road load and haul.
Bis says ownership of the DPRT concept that it “pioneered and developed with Powertrans”, was a crucial consideration.
“The acquisition of Powertrans follows an extensive process to bring together the dual powered road train technology and intellectual property,” Bis Industries CEO Ian Lynass says.
“Acquiring this business enhances the off-road load and haul services that we can offer to our customers, which we can further develop through building on the operational synergies in our knowledge base, including optimising the design and manufacturing process of the dual powered road train technology.
“It will also deliver ongoing financial benefits, such as the opportunity to drive a notable reduction in the production and capital costs of these key assets as well as other cost efficiencies by complementing existing strategic sourcing initiatives for the business.”
The effective purchase price is $20 million, plus $10 million for inventory and work-in-production.
Bis says it has historically taken the majority of the annual production of Powertrans, which has supplied all components of the DPRTs, including prime movers, powered trailers, dollies, and ongoing spare parts for equipment.
“The acquisition follows an extensive due diligence process that has been undertaken by Bis Industries and is expected to deliver ongoing earnings benefits via reduction in capital cost of DPRTs and lower annual repair and maintenance costs,” the company says.
“The transaction will be funded from existing available debt facilities. Transition of control of Powertrans to Bis Industries is expected to occur in January 2014. The parties consider that no regulatory approvals are required.”