Incitec Pivot Ltd. (IPL), Southbank, has reached an agreement to acquire 100 percent of the shares of French company Explinvest for €91 million (approximately A$142 million and US$103.7 million at current exchange rates), IPL announced in a Jan. 10 ASX filing.
Explinvest is the holding company of the Titanobel Group, a leading industrial explosives manufacturer and drilling, blasting, and technical services provider based in France.
“Consistent with IPL’s strategy, this transaction is highly complementary to Dyno Nobel’s existing operations, and will provide access to new markets where Dyno Nobel can leverage its premium technology offering through substitution and growth strategies,” IPL said.
Titanobel has a strong customer base in the mature and stable European market with exposure to the quarry and construction sector, the growing African hard rock sector, and the rapidly expanding mining and future facing minerals in the EMEA region, and sells in more than 30 countries, according to IPL.
Additionally, the company noted that Titanobel is supported by a well-established manufacturing base in France, which it said will be key to the delivery of the Dyno Nobel strategy in the region.
IPL reported the purchase price, on a debt free and cash free basis, represents an expected acquisition multiple of 7.8x FY2020 EBITDA, but did not provide any details on Titanobel’s financials. Additionally, the investment is expected to be earnings-per-share (EPS) neutral in the first full year of ownership and EPS accretive from then on as synergies are realized.
“Titanobel’s acquisition will fit well with our strategy of taking our core explosives business, for which we are recognized globally, to new markets. We are excited for the potential to service new clients and partners with our market-leading technology,” IPL’s Managing Director and CEO Jeanne Johns said in an ASX filing.
The transaction will be funded from IPL’s own existing cash and debt reserves.
The deal remains subject to the satisfaction of key milestones and conditions, including the French employee works council consultation process and foreign direct investment regulatory approval, and is expected to complete in June 2022.
According to an Australian Financial Review report, Titanobel has been owned by French private equity firm La Financiere Patrimoniale D’Investissement (LFPI) and management shareholders since 2015.