August 19, 2013 / 6:45 AM / in 4 years

Atlas Copco to acquire Edwards Group for up to $1.6 billion

STOCKHOLM (Reuters) - Swedish engineering group Atlas Copco (ATCOb.ST) said on Monday it was buying British industrial technology firm Edwards Group EVAC.O for up to $1.6 billion, an investment which should help it offset volatile swings in its mining business.

Yu Zhengsheng (3rd R), chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), and his delegation visit the industrial company Atlas Copco in Stockholm June 3, 2013. REUTERS/Janerik Henriksson/Scanpix

Atlas Copco, which employs more than 40,000, said it would acquire Edwards in an all-cash transaction and that the deal would close in the first quarter.

Edwards employs more than 3,200 and is a market leader in sophisticated vacuum pumps used in the chemical and pharmaceuticals industries. It had revenues of 595 million pounds in 2012.

Atlas has come under pressure from a weak mining industry, which has suffered as softer prices for commodities such as coal, copper and gold have raised doubts about future investment returns.

The Swedish firm’s compressor and industrial business, which like mining and rock excavation accounts for roughly a third of sales, have fared better and tempered a fall in group order bookings in the second quarter.

Atlas Copco said it would pay up to $10.50 per share for Edwards, including net debt, representing a 24 percent premium to Friday’s closing price of $8.45.

It said it saw several synergies between vacuum and compressed air solutions in sales, service and technology development.

“Edwards is a technology leader with a well-developed structure and solid customer relationships in industries we know well,” Atlas Copco CEO Ronnie Leten said in a statement. “It is a great fit for Atlas Copco.”

Shareholders will initially receive $9.25 per share, plus an additional payment of up to $1.25 once Edwards’ 2013 income statement is final, the company said.

Depending on the additional payment, the offer represents a premium of 11 to 26 percent to Edwards’ 30-day average closing share price up to Friday’s close, it said.

Reporting by Mia Shanley; Editing by Alistair Scrutton

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