STOCKHOLM — Swedish engineering group Atlas Copco yesterday said it was buying British industrial technology firm Edwards Group (EVAC.O) for up to $1,6 billion, an investment which should help it offset volatile swings in its mining business.
Reuters
Atlas Copco, which employs more than 40 000, said it would acquire Edwards in an all-cash transaction and that the deal would close in the first quarter.
Edwards employs more than 3 200 and is a market leader in sophisticated vacuum pumps used in the chemical and pharmaceuticals industries.
It had revenues of £595 million in 2012.
Atlas has come under pressure from a weak mining industry, which has suffered as softer prices for commodities such as coal, copper and gold have raised doubts about future investment returns.
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The Swedish firm’s compressor and industrial business, which like mining and rock excavation accounts for roughly a third of sales, have fared better and tempered a fall in group order bookings in the second quarter.
Atlas Copco said it would pay up to $10,50 per share for Edwards, including net debt, representing a 24% premium to Friday’s closing price of $8,45.
It said it saw several synergies between vacuum and compressed air solutions in sales, service and technology development.
“Edwards is a technology leader with a well-developed structure and solid customer relationships in industries we know well,” Atlas Copco chief executive officer Ronnie Leten said in a statement. “It is a great fit for Atlas Copco.”
Shareholders will initially receive $9,25 per share, plus an additional payment of up to $1,25 once Edwards’ 2013 income statement is final, the company said.
Depending on the additional payment, the offer represents a premium of 11 to 26% to Edwards’ 30-day average closing share price up to Friday’s close, it said.