BIS pays $30m for transport company
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The $1.5 billion, soon-to-be-listed mining logistics company BIS Industries is buying an industrial transport business called Powertrans in a deal worth $30 million.
BIS Industries is expected to list on the Australian Securities Exchange next month through lead managers UBS, Goldman Sachs and Merrill Lynch, with sources close to the company saying the shares will be priced in a range of between 10.9 and 13 times net profit before amortisation.
Powertrans had supplied the dual-powered road trains used in BIS Industries' off-road load and haul service offering, the company said.
BIS Industries would pay $20m for Powertrans, while a further $10m would be outlaid for inventory and work-in-production.
The deal would give BIS Industries ownership of the DPRT technology and related intellectual property that BIS Industries had pioneered and developed in conjunction with Powertrans over several years.
KKR bought BIS Cleanaway from Brambles for $1.83bn in 2006 but quickly sold the Cleanaway part of the business to Transpacific for $1.25bn.
The Powertrans purchase was likely to deliver ongoing earnings benefits through reductions in the capital cost of DPRT and lower annual repair and maintenance costs, the company said.
The debt-funded transaction will be finalised in January.
"Acquiring this business enhances the off-road load and haul services that we can offer to our customers," BIS Industries chief executive Ian Lynass said.
"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," he said.
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