Join our daily newsletter At The Bell to receive exclusive market insights
- Incitec Pivot (IPL) looks to break into new markets with the acquisition of French industrial explosives manufacturer Titanobel Group
- The ASX 100-lister will pay €91 million (A$142 million) to acquire Explinvest, the holding company of Titanobel, using existing cash and debt reserves
- It’s expected to add little in terms of earnings during the first year, but will become accretive from then on as synergies are realised
- Still, the deal is part of Incitec’s strategy to take its explosives manufacturing arm to new markets, particularly those in the EMEA region
- Shares in Incitec Pivot were up 2.42 per cent today to $3.38 as of 1:20 pm AEDT
Incitec Pivot (IPL) is looking to break into new markets with the acquisition of French industrial explosives manufacturer Titanobel Group.
According to an announcement released this morning, the ASX 100-lister will pay €91 million (A$142 million) to acquire Explinvest, the holding company of Titanobel, using existing cash and debt reserves.
While the purchase is expected to add little in terms of earnings during the first year of full ownership, Incitec said it will be accretive from then on as synergies are realised.
Still, the deal is consistent with the company’s overall strategy, and is “highly complimentary” to Dyno Nobel’s — Incitec’s manufacturer of commercial explosives — current operations.
“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 of future facing minerals in the EMEA region,” Incitec said in its announcement.
“The company is supported by a well-established manufacturing base in France, which will be key to the delivery of the Dyno Nobel strategy in the region.”
In addition to manufacturing explosives, Titanobel provides drilling, blasting and technical services across Europe, as well as parts of Western and Southern Africa, Asia, and the Pacific.
Upon completion of the acquisition, Incitec said it intends to capitalise on Titanobel’s existing production footprint and enhance the services offered by introducing its own market-leading technologies. That, the company said, would provide an “enhanced base” for a foray into the EMEA — Europe, the Middle East and Africa — region.
The EMEA market is particularly important to Incitec because of its size, the minimal requirements for ammonium nitrate, stable or growing minerals markets, and “large initiating systems usage with low penetration of electronic detonators.”
“Titanobel’s acquisition will fit well with our strategy of taking our core explosive business, for which we are recognised globally, to new markets,” Incitec’s Managing Director and CEO Jeanne Johns said.
“We are excited for the potential to service new clients and partners with our market leading technology.”
Shares in Incitec Pivot were up 2.42 per cent today to $3.38 as of 1:20 pm AEDT.
