Seven Group Holdings is set to take 100 per cent ownership of Coates Hire, a supplier of equipment to the mining industry.
The Kerry Stokes-chaired company will acquire the 53.3 per cent stake in Coates that it does not already own from Carlyle Asia Partners for $517 million.
Seven Group believes total ownership of Coates will enhance the company’s portfolio by expanding its industrial services division with the addition of an operating business.
The acquisition will be funded through Seven Group’s debt facilities and cash, including proceeds from the $540 million sale of its WesTrac China subsidiary that was announced in August.
Seven Group managing director Ryan Stokes said the company was pleased to reach agreement with Carlyle to acquire the remaining Coates shares.
“We have had a long history with the Coates Hire business and believe with the visible market opportunity associated with East Coast infrastructure activity, along with the current performance of the business and management team, the company is extremely well positioned to create value for all shareholders,” Ryan Stokes said.
“The move to full ownership of Coates Hire will enhance Seven Group’s position as a leading operator of industrial services businesses, with strong macroeconomic environment and a positive outlook providing the potential for significant opportunities to be realised.”
The Coates acquisition continues the diversified investment company’s focus on becoming the leading operator of industrial services businesses in Australia, it added.
Seven Group also owns Caterpillar dealer, WesTrac, and AllightSykes, which are both suppliers for the mining industry.