Australia's Bradken opens books to PE suitors

Bradken said in a regulatory filing that it had received other inbound inquiries from prospective investors. It has also embarked on several restructuring initiatives intended to deliver growth at a time when the mining services sector is struggling in the face of weaker commodities prices.

PEP and Bain are willing to pay A$5.10 per share for all outstanding shares, valuing the company at approximately A$872 million ($731 million). This follows a bid of A$6.00 per share submitted in August that did not result in a firm offer.

Bradken shares closed up 32.5% at A$4.40 the day news of the offer was disclosed last week. They are currently trading just above this level. They remain down by more than 26% since the start of the year.

Founded in 1922, Bradken produces milling and crushing equipment used in mineral processing as well as mining equipment, cast metal services, and products for the transport and general industrial sectors. It employs over 5,000 people and operates 57 manufacturing, sales and services facilities in Australia, New Zealand, the US, Canada, China, Malaysia, South Africa, Indonesia, the UK and South America.

Net profit dropped 68% year-on-year to A$21.5 million for the 12 months ended June 2014. Revenue fell 14% to A$1.13 billion while EBITDA was down 22% at A$143 million. Bradken relies on the resources sector for 92.5% of its revenues, with 26.2% alone tied to iron ore mining and processing activities. Australia and New Zealand account for nearly half of revenue.

The company has been cutting jobs and closing several foundries in Australia in order to cut costs.

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• Topics
• Australasia
• Industrials
• Buyouts
• Commodities
• manufacturing
• Australia
• buyout
• Pacific Equity Partners
• Bain Capital Asia