April 19, 2018 / 6:11 AM / 5 months ago

BRIEF-Weir Group to buy Esco Corporation in $1.28 billion deal

April 19 (Reuters) - Weir Group PLC:

* WEIR HAS ENTERED INTO A BINDING AGREEMENT TO ACQUIRE ESCO CORPORATION (“ESCO”), A US COMPANY BASED IN PORTLAND, OREGON, FOR AN EQUITY VALUE OF US$1,051M AND AN ESTIMATED ENTERPRISE VALUE OF US$1,285M.

* IN 2017 ESCO DELIVERED REVENUES OF US$632M AND PRO FORMA ADJUSTED EBITA OF US$68M.

* ESCO SHAREHOLDERS WILL RECEIVE 59% IN CASH, PART FUNDED FROM NET PROCEEDS FROM A 7.4% EQUITY PLACING OF WEIR SHARES VIA AN ACCELERATED BOOKBUILD.

* THEY WILL ALSO RECEIVE 41% PAID IN NEW WEIR SHARES, CALCULATED AT COMPLETION AND CURRENTLY REPRESENTING C.6% OF ENLARGED WEIR SHARE CAPITAL

* ESCO BOARD HAS UNANIMOUSLY APPROVED TRANSACTION AND SUPPORT HAS BEEN RECEIVED FROM REQUIRED MAJORITY OF ESCO SHAREHOLDERS.

* BOARD OF WEIR WILL INITIATE A PROCESS TO SELL FLOW CONTROL DIVISION. THIS PROCESS WILL FOCUS ON MAXIMISING VALUE FOR SHAREHOLDERS, WITH ALL OPTIONS TO BE CONSIDERED AND NO FIXED TIMETABLE

* PROCEEDS WILL BE USED TO FURTHER REDUCE LEVERAGE AND TO FUND FUTURE INVESTMENT IN GROWTH IN OUR CORE PLATFORMS. Source text for Eikon: Further company coverage: (Reporting By Sinead Cruise)

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