Listed Dunedin company Scott Technology has purchased Auckland-based mining industry manufacturer Rocklabs for an undisclosed mix of cash and Scott Technology shares.
The deal is yet to be finalised and will be concluded next month, but it was understood the deal may be worth more more than $8 million.
Rocklabs employs 35 people and manufacturers mechanised and automated sample preparation equipment and gold assay laboratory sampling materials for the mining industry, including rock crushers, ring mills, sample dividers and other systems, with almost 100% exported to clients in 98 countries.
Scott chairman Stuart McLauchlan said the company retained a strong and unencumbered balance sheet with money on deposit and would continue to look for other acquisitions.
While there was an economic downturn at hand, he said for the right company it was a buyer's market, highlighting that Rocklabs operated in the mining-resource sector which was still enjoying buoyant activity overseas.
He declined to reveal the purchase price, other than to say it was "significant", as details of the acquisition would not be finalised and released until next month.
Scott manufactures production lines from its Christchurch plant and in Dunedin employs about 60 people at its meat processing robotics division, which is to shift to a $3 million purpose-built site in Kaikorai Valley by the end of August.
Scott managing director Chris Hopkins said while Scott had not traditionally been in the mining sector, both companies shared a common core business in engineering and automation.
"Part of Rocklabs' business strategy is to move towards greater automation of their products and systems.
This is an area in which Scott Technology can provide enhanced design and technical expertise," Mr Hopkins said.
Mr McLauchlan said there were a number of synergies between the companies and noted the acquisition would be earnings positive for Scott, contributing positively to the group's overall bottom line.
Due diligence to purchase Rock-labs in Onehunga, from Dr Ian Devereux, had been completed.
Shares in Scott Technology, trading about $1.20, were unaffected by the purchase announcement.
