Weir Group PLC · LSE:WEIR
Weir — The Weir Group — Merger or Acquisition (December 2007)
18 slides from Weir's merger presentation, December 2007
Slide 1: Acquisition of CH Warman
The Weir Group PLC | Analyst Pack Excellent Engineering Solutions Acquisition of CH Warman Final
Slide 2: The Weir Group: at-a-glance
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions The Weir Group: at-a-glance attractiveness Market 2007 Share price Portfolio c 800p transformed 2002 Market cap Non core businesses sold Share price £2.12 c £1.6bn Under-performers restructured Competitive Market cap £43
Slide 3: Acquisition of CH Warman
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Acquisition of CH Warman Group Revenue 9 Exposure to the fast growing African mining Naval & marine Power generation market with high aftermarket content Oil & gas Minerals processing Water General industrial 9 Consolidate
Slide 4: History of CH Warman
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions History of CH Warman The CH Warman Pump In the late 1960’s, the main In 1999 the international pump In 2008 The Weir Group PLC Group was founded in international operations were business was purchased by acquires CH Warman
Slide 5: CH Warman: at-a-glance
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions CH Warman: at-a-glance FINANCIALS $80m supplier of slurry pumps and associated equipment and services to the African mining industry Based in Johannesburg with network of 11 service centres: 7 in South Africa and one e
Slide 6: CH Warman: products & services
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions CH Warman: products & services Pumps Spares Service CAGR: 31% CAGR: 20% CAGR: 26% Î Extensive range of pump Î Comprehensive parts Î Fully equipped, strategically products and associated spare stockholdings and service loca
Slide 7: CH Warman: key market drivers
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions CH Warman: key market drivers African GDP on the up… Mining capex expanding… Sub-Saharan Africa – Real GDP growth Global capex by major mining companies (annual % change) 36.2bn 24.6bn 20.0bn 13.9bn Source: FT, 19 Nov 2007
Slide 8: CH Warman: consolidation objectives
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions CH Warman: consolidation objectives Manufacturing and systems review, Identify location / operational synergies utilising Weir Group Intranet & IT toolset and new market opportunities Utilising experienced executive team t
Slide 9: World class capability: Leading product to growing market
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions World class capability: Leading product to growing market WORLD CLASS CAPABILITY OPPORTUNITY TO EXCEED Enhanced capabilities CUSTOMER EXPECTATIONS High-wear materials Products to improve performance − Cross selling to
Slide 10: Weir Group + CH Warman
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Weir Group + CH Warman An increasingly focused portfolio with exposure to high growth markets and segments PRO FORMA REVENUE PRO FORMA REVENUE BY SECTOR BY GEOGRAPHY 22% 27% Industrial, Naval, Marine & Water Developing Nav
Slide 11: Conclusion: Excellent match with key Weir criteria
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Conclusion: Excellent match with key Weir criteria 3 Adds to Weir’s portfolio of high growth, high margin Minerals business 3 Provides critical mass to enhance productivity through application of Weir’s proven management p
Slide 12: Financials
The Weir Group PLC | Acquisition Analyst Packof CH Warman Excellent Engineering Solutions Acquisition of CH Warman Financials 12
Slide 13: Transaction Details
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Transaction Details Purchase Consideration $231m • $2m net debt • annualised EBIT multiple of 12.9 times • annualised EBITDA multiple of 12.1 times Purchase price payable in cash at completion • existing cash balances
Slide 14: Target timetable
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Target timetable Today Announcement of agreement on terms 10 December Submission for South African merger approval 29 February Merger approval granted 29 February Completion of transaction 14
Slide 15: CH Warman Financials
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions CH Warman Financials Year Year End End $m June ‘06 June ‘07 Revenue 59.3 79.6 EBITDA 10.9 19.0 Operating profit 9.9 17.8 Operating Margin (%) 16.7 22.4 Effective tax rate (%) 8.0 14.0 Operating cash flow 9.4 2.5 Working Ca
Slide 16: Summary
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Summary 3 Financially attractive Immediate earnings enhancement Annualised post tax ROI 6.6% Pro forma Net Debt / EBITDA 2.1 times 3 Consistent with group strategy 3 Broadens geographic footprint 3 Platform for futur
Slide 17: Trading Update – Dec 2007
The Weir Group PLC | Acquisition of CH Warman Excellent Engineering Solutions Trading Update – 4 Dec 2007 The Weir Group PLC today issues the following trading update in respect of the 52 weeks ending 28 December 2007. In the second half, the Group’s financial performance has been strong as a result
Slide 18: Acquisition of CH Warman
The Weir Group PLC | Acquisition Analyst Packof CH Warman Excellent Engineering Solutions Acquisition of CH Warman 18
The Weir Group — Merger or Acquisition (December 2007) on 6ix