Acquisitions - A token of strength

 Ludowici was only one of many FLSmidth acquisitions in 2012.

Ludowici was only one of many FLSmidth acquisitions in 2012.

There are many motives for acquisitions. One of FLSmidth’s motives is providing the market’s most advanced and comprehensive products and services to its customers. This will extend FLSmidth’s status as a world-wide supplier of systems and services in the five minerals-focused industries: coal, iron ore, fertilizer, copper and gold. The goal is to become full flowsheet providers within the core products of each mineral. The series of nine acquisitions, which FLSmidth has executed within Minerals since March 2012, represents a considerable step in this direction and strongly complements FLSmidth’s organic growth.

We’ve been extremely busy and have completed transactions all over the world. In 2013, the focus will predominantly be on consolidation and integration, and on realizing expected synergies related to acquisitions and delivering on the strategy.
— Kaspar Ronald Kristiansen Head of FLSmidth Global Mergers & Acquisitions

Ludowici, Australia

FLSmidth’s biggest acquisition since acquiring GL&V’s Process division in July 2007 is the Australian company Ludowici. This acquisition closed on 3 July 2012. With 1,100 employees globally, Ludowici was approximately one-tenth the size of FLSmidth. Ludowici is globally recognized for state-of-the-art coal centrifuges and vibrating screens, in addition to complementary wear resistant products and services for the minerals industries.

Acquiring Ludowici added substantially to the completion of FLSmidth’s coal processing flowsheet and enhances its copper and iron ore processing offerings with leading technologies and brands. Additionally, Ludowici will support FLSmidth’s expansion of the Customer Services division, as approximately 50 percent of the company’s revenue is related to service activities, spare parts and consumables.

Further, Ludowici is an excellent geographic fit for FLSmidth. The company is headquartered in Brisbane, Australia, and has a strong presence in this region, as well as other major mining countries such as South Africa, India, China, Chile, Peru and the USA. The acquisition contributes to FLSmidth’s extensive geographic diversification strategy.

When announcing the transaction, Jørgen Huno Rasmussen, former Group CEO, stated: “What GL&V Process was to FLSmidth in copper, Ludowici will be for FLSmidth in coal. Coal is equal in size to all other minerals segments combined in terms of material handled, and with the addition of Ludowici’s products, we will be able to offer coal customers a unique One Source solution."

Decanter Machine, Inc., United States

FLSmidth’s scope in the coal and fertilizer minerals industries was further extended by the purchase of privately owned Decanter Machine, Inc., on 28 September 2012. Founded in 1983, the company’s headquarters are in Johnson City, Tennessee. Decanter manufactures and provides repair services for mineral processing centrifuge equipment, particularly screen bowl, solid bowl and hyperbaric centrifuges. This American pioneer obtained its leading market position through steadfast dedication to three objectives:

  • Providing customers with the highest levels of service
  • Developing and manufacturing the most technologically advanced equipment available anywhere
  • Offering durable and cost-effective repair solutions

Decanter’s 146 employees are quickly becoming part of FLSmidth’s global group. FLSmidth Business Integration Manager Bob Karlik commented on the acquisition, saying, “I am very excited and optimistic about our future. As planned synergies begin to unfold, we will be able to provide mutual opportunities for growth and success within the FLSmidth organization and most importantly, offer valuable products and services to our customers.”

Holland Loader, United States

During the summer of 2012, FLSmidth made two purchases of privately held companies in the United States: Holland Loader in May and Process Engineering Recourses, Inc. (PERI) in June.

Holland Loader is a specialist in bulk material handling products such as belt loaders, off-road tractors/trailers, mobile bridge conveyors and dozer traps. These technologies are now managed by the FLSmidth offices in Spokane, WA, USA. Meanwhile, Holland Loader’s former president, mining engineer Steve Svatek, has become a valued asset to FLSmidth’s Business Development Group. Darrell White, business sponsor for this technology purchase, comments, “The Holland Loader technologies are exceptionally innovative. Their integration into FLSmidth’s existing product suite was a logical fit and has distinctly sharpened FLSmidth’s competitive edge in the market.”

Process Engineering Recourses (PERI), United States

The integration of PERI, a pioneer in advanced process control solutions in the automation industries, substantially complements FLSmidth’s capabilities within mining and minerals. The company, which was founded in 1996, develops, manufactures and installs on-line slurry analysis systems for the mining and minerals industries. In 2011, PERI had a major market breakthrough and became recognized for its highly effective and innovative technologies. Under the FLSmidth brand, PERI™ analysis systems can now be provided to customers globally.

iSAM AG, Germany

In October, FLSmidth acquired the market-leading technologies and products related to unmanned operation and process optimization of stackers, reclaimers and train loading systems from the German company iSAM AG. The technologies and products acquired will enable FLSmidth to offer complete, unmanned integrated bulk handling solutions to mining, stockyard and port facility customers in line with FLSmidth’s One Source strategy.

Teutrine GmbH, Germany

The German company, Teutrine GmbH, joined the FLSmidth Plant Operation and Equipment Services, which is part of the Customer Services division, on 31 August 2012. Teutrine has 45 employees who joined the global Customer Service organization and provide site management and installation services as well as mobile solutions for repairs and refurbishment as the main focus areas. Teutrine was founded in 1972 by Antonius and Annemarie Teutrine in Bremen, Germany. Their daughter, Gabriele Teutrine, will continue her work in the company as Managing Director.

The acquisition has substantially complemented FLSmidth’s on-site repair and refurbishment services. The joint effort with Teutrine significantly supports the FLSmidth Customer Services division in meeting its customers’ needs.

M.I.E. Enterprises & Mayer Bulk, Australia

The two Australian companies, M.I.E. Enterprises Pty Ltd. and Mayer Bulk Pty Ltd., have become integral parts of Customer Services since their acquisition on 4 September 2012. The companies together employ approximately 200 employees in service and construction, who now complement FLSmidth’s full-service capabilities in construction, commissioning, maintenance and repair services.

M.I.E. Enterprises provides the mineral processing and material handling segments with highly complex technical assistance, project management and installation and maintenance services for mining equipment. Mayer Bulk is an expert in the design of mobile machines, cranes and material handling structures.

Combined with FLSmidth's current set-up and recent acquisition of Ludowici, these acquisitions further accelerate the development of the company's regional customer services capabilities, offering a unique combination of service footprint and skills—which makes FLSmidth one of the strongest service providers in Australia, while at the same time providing opportunities, through FLSmidth's global footprint, to expand the acquired new expertise to other markets where the FLSmidth Group is active.

SEPEC, China

An exciting move for the FLSmidth group was its first acquisition with a minority partner transaction in China with a company called SEPEC, a supplier and manufacturer of air pollution control equipment. SEPEC’s extensive customer base and production capabilities facilitate the distribution of FLSmidth Airtech’s state-of-the-art air pollution control equipment in the Chinese market. Due to China’s increasingly strict emission control requirements, the demand for air pollution control technology is growing. By joining forces with SEPEC, FLSmidth Airtech is able to obtain a significant new share of the market. The collaboration therefore represents a unique growth opportunity for both parties. Furthermore, the acquisition with a minority partner helps FLSmidth to pursue its objective of protecting the environment by contributing to a sustainable development.

There are currently more than 100 employees in FLSmidth SEPEC's Beijing office, which is headed up by Ni Weidong, CEO, who reports to Ole Bøegh, head of Air Pollution globally.

Following the acquisition, former Group CEO Jørgen Huno Rasmussen said, "FLSmidth and SEPEC are the perfect fit. FLSmidth's strong technological platform coupled with SEPEC's strong organization, reputation and customer base in China will enable us to develop air pollution control products, which are uniquely designed together with the Chinese customer and fit his specific requirements."

Strategically sound

FLSmidth’s recent acquisitions represent an important step in terms of reaching our ambitious strategic targets and illustrate FLSmidth’s growing strength towards becoming its customers’ world-wide, One Source full-service provider. The acquisitions have been logical, comprehensive and strategically sound, thus strengthening FLSmidth’s footprint and technology offerings.

On being asked about the previous months, Kaspar Ronald Kristiansen, head of FLSmidth Global Mergers and Acquisitions, said, “We’ve been extremely busy and have completed transactions all over the world. In 2013, the focus will predominantly be on consolidation and integration, and on realizing expected synergies related to acquisitions and delivering on the strategy.”