Orica buys U.S. firm Excel Mining for US$670 mln

AUSTRALIA'S ORICA Ltd, the world's biggest explosives maker, has agreed to buy Excel Mining Systems LLC from U.S. private equity firm Snow Phipps Group LLC for US$670 million, extending its reach in the booming mining services industry.

Orica said on Monday the acquisition of Excel, which makes roof support products for underground mines, would be immediately earnings per share accretive and was complementary to the UK mining services business Minova that it bought in 2006.

"The opportunity to acquire the Excel business is consistent with our strategy of growing our business close to the core in markets that we believe have a long term growth outlook," Orica Managing Director Graeme Liebelt said in a statement.

Orica said earlier this month it sees significant profit growth this year, with a global mining boom, driven largely by strong demand for minerals from China, boosting earnings at its mining services division.

Cost benefits from the Excel deal, including lower administrative costs, an improved supply chain and tax benefits, were expected to reach around US$50 million a year after three years, Orica said.

Reuters