Mincon buys remaining US stake

Shannon-based mining equipment firm Mincon yesterday acquired the minority interest in Mincon Rockdrills USA for $2.42m (€1.97m). The transaction, when complete, will make the US firm a wholly owned subsidiary of Mincon.

In 2003, Mincon purchased 50% of the business and increased its shareholding to 75% a year later.

The American facility in Benton, Illinois specialises in down-the-hole (DTH) and horizontal directional drilling (HDD) bits.

“Our manufacturing plant in Benton is an integral part of our operations, manufacturing a substantial portion of the group’s bits with the added benefit of being centrally located in the USA — the largest surface drilling market in the world,” said Mincon chief executive, Kevin Barry.

Davy Stockbrokers said while the transaction is relatively small, it demonstrates the group’s further progress in its strategy of growing the business through acquisitions.

The $2.42m consideration will be realised with the issue of 3,069,838 new Mincon shares.

In 2013, profits attributable to the minority interest were €245,000. In the first half of 2014 profits were €84,000.

The beneficial owners of the stake include the current managing director of Mincon Rockdrills, Mike Jones.

Davy analyst, Colin Sheridan said he expects the company to seal further, larger deals in 2015 as it looks to mobilise the company’s significant cash reserves of more than €41m.

Yesterday’s deal is likely to increase net profit of 1.9% and 1.5% in 2015 and 2016 respectively.