Mine explosives major Orica has wrapped up its acquisition of US mining services businesses it has owned 50-50 with Alabama-based Nelson Brothers Inc for more than 25 years.
Orica said in March this year it was paying US$25 million and retiring $48 million of debt attached to two joint ventures, Nelson Brothers LLC and Nelson Brothers Mining Services LLC, to move to 100% ownership of both.
Nelson Brothers Inc is buying the specialty chemicals business unit from the JV entities.
Orica said the deal delivered it full ownership of four US emulsion plants and “wider access to downstream markets”. As well as the Rojo, Black Thunder, Samoset and St Paul emulsion facilities, it was getting strategically located initiating system magazines and a fleet of mobile manufacturing unit bulk explosives delivery vehicles.
“The deal also expands Orica’s exposure in critical end markets through improved supply chain and delivery capabilities,” the ASX-listed company said.
“The ability to deliver direct sales to customers can in-turn facilitate a stronger adoption of Orica’s advanced blasting technology and increased cross selling across Orica’s integrated product and service offerings.”
Orica expected a circa-A$35 million per annum EBIT uplift when the businesses were fully integrated, “with further opportunities to grow revenue and realise additional business cost synergies”.
Established in 1956, Nelson Brothers initiated the Orica alliance in 2000.
