Sandvik says it is dipping into the US$2 billion-plus mining filtration and dewatering equipment market with its acquisition of Italy’s Diemme Filtration.
Stockholm-listed Sandvik did not disclose the acquisition price for Diemme Filtration, a circa-$115 million-a-year business with about 200 employees. Back in 2009 Finland’s Outotec, now part of Metso, paid €93 million for mining filtration market leader Larox, a €208 million-a-year enterprise with circa-560 employees.
Lugo-based Diemme Filtration is seen as a high-performance filter press specialist.
Sandvik is creating a new filtration division within its Rock Processing arm, which sits alongside its biggest business, mining.
“With the acquisition Sandvik enters the filtration and dewatering segment, strengthening Rock Processing’s offering across the mining value chain,” the company said.
“Filtration is a critical process step in downstream mining, and Diemme Filtration’s solid-liquid separation solutions bring significant customer value by enabling improved productivity, water recovery and tailings management.”
Sandvik CEO Stefan Widing said the deal was aligned with the company’s plan to grow in downstream mining niches.
“With Diemme Filtration we add a profitable and fast-growing niche within mineral processing to our core offering that strengthens our position with key mining customer groups and brings an attractive aftermarket business,” he said.
Filtration market annual demand growth is estimated by Sandvik to be in the low double-digits.
“Declining ore grades are pushing mines toward higher slurry volumes, materially raising the need for increased filtration capacity,” it says.
“Additionally, stricter water and tailings regulations are driving demand for water preservation solutions and denser tailings.”
Sandvik said Diemme Filtration’s EBITA margin was accretive to that of its Rock Processing business. The deal, expected to close in the September quarter this year, is also expected to be earnings-per-share accretive for Sandvik.
