Wajax Acquires Weir Process Equipment Business and Increases Monthly Distributions
Saturday, August 30th 2008
Wajax Income Fund announced that its Industrial Components business unit, Kinecor, has agreed to acquire the assets of Weir Process Equipment, a division of Weir Canada Inc. for $25.4 million, subject to post-closing adjustments. The transaction is conditional on approval by the federal Competition Bureau. Closing will occur following receipt of approval which is expected in September. Weir Process Equipment, which was previously known as Peacock Inc., is a leading distributor of pumps, process controls and instrumentation, filtration products and material handling equipment to the oil & gas, power generation, mining and infrastructure sectors across Canada. These products are complementary to Kinecor’s current offering and the acquisition significantly enhances Kinecor’s position in the Canadian process equipment market. The acquired business will be combined with Kinecor’s process equipment operation under the Peacock name.
For the twelve month period ended June 30, 2008, Weir Process Equipment had adjusted annual sales of approximately $50 million and adjusted earnings before interest, taxes and amortization of approximately $5 million. It is expected that over time the profitability of the combined business will be enhanced through expense reductions and revenue growth by leveraging Kinecor’s extensive branch network and customer base.
The Fund also announced a further $0.01 per unit increase in the monthly distributions for September and October to $0.36 per unit per month ($4.32 per unit annualized). Distributions for these two months will be paid on October 20 and November 20 to unitholders of record on September 30 and October 31 respectively.
Commenting on the acquisition, Neil Manning, President and CEO, stated “We are excited about the future prospects afforded us with this acquisition. Combining this business with our Kinecor operation clearly establishes us as a leading distributor of process equipment in Canada. This acquisition will be immediately accretive and is reflected in our decision to further increase monthly distributions.”
Wajax is a diversified income fund that has three core distribution businesses engaged in the sale and after-sales parts and service support of mobile equipment, industrial components and power systems, through a network of over 100 branches across Canada. Its customer base spans natural resources, construction, transportation, manufacturing, industrial processing and utilities.
