Melbourne-based explosives manufacturer Orica Ltd. has agreed to sell its Minova business to Aurelius Group, a European based investment firm, for A$180 million (approximately US$129 million at current exchange rates), subject to transaction costs and customary completion adjustments
Orica announced in May its intention to pursue a sale of Minova, which delivers ground support solutions for the mining, civil/tunneling, geotechnical, and construction industries (GM May 21, p. 34).
Orica Managing Director and CEO Sanjeev Gandhi said in a Dec. 13 statement that the sale of Minova “is consistent with our refreshed strategy, which identified the subsidiary as non-core to Orica.” The divestment will allow the company “to focus on its four key business verticals of growth – mining; quarry and construction; digital; and mining chemicals.”
The Minova business will benefit from new ownership with more focus and capital to support its growth, he said.
In its own statement, Grünwald, Germany-based Aurelius said with the global drive for electrification substantially raising demand for precious metals (hard-rock mining), while thermal coal (soft rock) is in structural decline, Minova, with its globally leading resin know-how, “is ideally placed” to benefit from the ongoing transition from soft rock to hard rock and infrastructure in the coming years.
The investment firm sees “significant growth potential” to be realized from underlying market growth, as well as through investments into global footprint and add-on acquisitions.
Minova reported a 6 percent increase in EBIT to A$22 million in the fiscal year ended Sept. 30, 2021, up from the year-ago A$20.8 million. Revenues came in 1 percent up, at A$474.3 million versus A$468.3 million the previous year. Sales volumes were slightly higher year-on-year.
Orica said in its FY2021 earnings report released in mid-November (GM Nov.12, p. 32) the Minova business remains EBIT and cash flow positive, “driving good momentum into the future”.
The transaction with Aurelius is expected to close in the first quarter of next year, subject to regulatory approvals and other customary closing conditions.