Neles has signed an asset purchase agreement to acquire the valve and pump businesses of the Finland-based technology company, Flowrox. The acquisition will complement Neles’ offering and exposure to the mining and metals industry.
The mining and metals market is expected to have strong growth for the next decade, driven by the increasing demand for metals, ore depletion and underlying investments into more efficient processing. With good long-term fundamentals and service intensity, mining and metals is an attractive industry for Neles. The acquisition will enable it to better leverage growth opportunities in minerals processing applications.
“Diversification of our customer industries is a key component of Neles’ growth strategy,” says Neles CEO, Olli Isotalo. “This acquisition is an excellent fit for Neles as Flowrox is a well-known niche player in flow control within mining and metals and it has the right offering and very strong competence and know-how. Going forward, we plan to continue developing the transferring businesses as a platform for growth in a strategic focus industry.”
“In recent years, Flowrox’s operations have expanded in many areas through product development and acquisitions,” adds Flowrox CEO, Jukka Koskela. “Now it is time to focus. This business transaction will enable us to advance the remaining businesses to the next level. We see Neles as a great partner and a company who can further develop the valve and pump businesses.”
In 2020, Flowrox’s valve and pump businesses had sales of about €30 million. The businesses’ sales in fiscal year 2021 are expected to remain at the level of 2020. The profitability of the carved-out businesses is comparable to Neles’ in terms of adjusted EBITA margin. The transaction also includes the Flowrox brand. The acquired businesses employ approximately 110 people and have manufacturing in Finland, Australia, South Africa and the United States, as well as well-established sales channels in over 80 countries. The closing of the acquisition is estimated to take place in November.
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