31/10/2017 - 15:20

Emeco now a bigger western force

31/10/2017 - 15:20

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Perth-based Emeco Holdings has added to the acquisition of two east coast mining equipment rental businesses, today announcing a $70 million takeover of fellow Western Australian company Force Equipment.

Perth-based Emeco Holdings has added to the acquisition of two east coast mining equipment rental businesses, today announcing a $70 million takeover of fellow Western Australian company Force Equipment.

It comes after the three-way merger with Orionstone and Andy’s Earthmoving was competed in March.

The WA-focused acquisition is to be funded by an $80 million entitlement offer.

Emeco managing director and CEO Ian Testrow said the acquisition would allow the company to grow its rental business, enhance its maintenance capabilities and diversify its customer base.

"The acquisition of Force represents an important step in realising Emeco's strategy of becoming the world's leading provider of equipment rental and to maximise value for shareholders," he said.

Force has a Pilbara workshop that will increase Emeco’s exposure to the iron ore industry and the capability to rebuild components that will reduce risks from any disruptions to the supply of components.

Force Equipment was founded 30 years ago in the Goldfields. Force’s chief executive, Jason John, and chief financial officer Ben MacKinnon will be joining Emeco.

Emeco had a net loss of $180 million last financial year, an improvement from the previous loss of $225 million. At the time, Mr Testrow said the company would be selectively pursuing strategic consolidation opportunities.

The $10 million raised above the purchase price for Force will cover transaction costs and boost working capital. The deal is expected to be completed by the end of November.

Emeco is in a trading halt until Thursday. Shares closed yesterday at 24 cents.

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