Share placing funds move Down Under for Fenner
ENGINEERING specialist Fenner is to raise £36.5m through a share placing as it announced its latest acquisition.
The Hull-based group, which is a world leader in conveyor belt manufacturing, said the placing of the 15.65m shares with institutional investors would finance Fenner's acquisition and development programme.
Fenner has acquired Northern Belting Specialists, based in Whyalla, Australia, for around AUS$5m (£2.3m) from Amalia Austin and Colin Kranz.
Northern specialises in belt splicing, rubber lining works, mechanical and technical servicing and sales.
Fenner also revealed today it was planning a AUS$70m (£32.4m) investment to build a new 'greenfield' manufacturing plant for steel cord conveyor belts at Kwinana, which is located south of Perth in Australia.
The facility will be the first new conveyor belt plant built in Australia in more than 60 years. Construction on a 4.6 hectare site will begin next month, with production expected to commence in the second quarter of 2009.
Mark Abrahams, Fenner's chief executive, said: “The fund raising announced today will help us continue the momentum of our acquisition and organic development programme and benefit from the many growth opportunities available to us across our markets.”
Mr Abrahams said Fenner was presently in negotiations to buy a small number of companies. He said these were mostly small and medium-sized businesses.
The acquisition of Northern follows Fenner's purchase, through its subsidiary, Fenner Precision, of US company Winfield Industries earlier this month for £2.4m.
Fenner also boosted its US operations last month with the acquisition of technical fabrics business Prodesco in a deal worth up to £32m.
The Pennsylvania-based firm develops and manufactures highly specialised technical fabrics used in industrial, aerospace and chemical equipment.
It also owns Secant Medical which produces textile structures for medical devices used to treat cardiovascular and orthopaedic conditions.
Fenner is the world leader in the global conveyor belting market with 3,500 staff. Its products include lightweight and heavyweight conveyor belting for the mining and power generation markets, precision motion control products for the computer, copier and mechanical equipment markets, and sealing products for the mining, hydraulics and oil and gas industries.
In November the group paid £1.3m for the New York privately-owned engineering business B-loc which produces and sells specialist power transmission and motion control components and in December it bought Australian company Spliceline.
In a separate trading update, Fenner said the group continued to perform strongly through its Advanced Engineered Products and Conveyor Belting divisions.
It said it expected results for the half year to February 29 to be at the top end of expectations and said it viewed the future with confidence.
Mr Abrahams added: “Fenner's performance has been good in the first half, our businesses are well placed in strong markets and we are confident about prospects.”
Today's share placing, which represents 9.9% of the issued share capital of the group, will also allow Fenner to maintain interest cover and debt at levels which will allow the group to expand, it said.
