Australian mining and heavy equipment rental company Emeco said it had agreed to merge with Orionstone and Andy’s Earthmovers in a three-way transaction that also included its recapitalisation.
Based in Mackay, Queensland, Orionstone is a privately-owned heavy earthmoving equipment supplier with a fleet of over 200 machines located across the country.
And Andy’s Earthmovers is a privately-owned equipment rental business based in Bendigo,
Victoria, covering mining and civil customers located in South Australia, Victoria, New South Wales, Western Australia and the Northern Territory. Its fleet includes 145 machines.
The combined entity - which would remain as a listed company – would then seek to raise AU$20 million (€13.6 million) from investors once the deal had been approved.
Emeco said the deal would provide it with a sustainable capital structure for the long-term, as well as an increased scale, expanded equipment portfolio, operating efficiencies, and greater resilience through the cycle.
Earlier in September, Emeco reported lower revenues and continued losses in its full-year 2016 financial results after being hit by impairments in its Canadian business.
Emeco chairman Peter Richards said the deal was an important step forward for the company.
“The Emeco board spent considerable time evaluating a range of alternatives in order to ensure this Transaction represents the best available value for shareholders.
“The comprehensive recapitalisation plan announced today includes a rights issue allowing our shareholders the opportunity to participate in the future upside and value created by the combined group.”
The company added that combining the management expertise of the three businesses would also create a “best in class” team.