Bis Industries, a leading provider of innovative logistics services to the Australian resources sector in the production phase, is pleased to announce it has entered into an agreement to acquire the Powertrans business and its intellectual property.

Powertrans is a key supplier of the Dual Powered Road Trains utilised in Bis Industries’ off-road load and haul service offering.

The effective purchase price for Powertrans is $20 million, plus an additional $10 million for inventory and work-in-production which is expected to be utilised within the operations of Bis Industries, or otherwise monetised in the next 12 months.

The acquisition importantly provides Bis Industries with ownership of the DPRT technology and related intellectual property, which Bis Industries has pioneered and developed in conjunction with Powertrans over the past several years.

Bis Industries has historically taken the majority of the annual production of Powertrans, which has supplied all components of the DPRTs, including prime movers, powered trailers, dollies, and ongoing spare parts for equipment.

The acquisition follows an extensive due diligence process that has been undertaken by Bis Industries and is expected to deliver ongoing earnings benefits via reduction in capital cost of DPRTs and lower annual repair and maintenance costs.

The transaction will be funded from existing available debt facilities.  Transition of control of Powertrans to Bis Industries is expected to occur in January 2014.   The parties consider that no regulatory approvals are required.

Commenting on the acquisition, Ian Lynass, CEO of Bis Industries, said:

“The acquisition of Powertrans follows an extensive process to bring together the Dual Powered Road Train technology and intellectual property with the customer relationships and operational expertise that Bis Industries has today.

“Acquiring this business enhances the off-road load and haul services that we can offer to our customers, which we can further develop through building on the operational synergies in our knowledge base, including optimising the design and manufacturing process of the Dual Powered Road Train technology.

“It will also deliver ongoing financial benefits, such as the opportunity to drive a notable reduction in the production and capital costs of these key assets as well as other cost efficiencies by complementing existing strategic sourcing initiatives for the business.”