makes euro acquisition

very important strategic acquistion in Holland with access to Eastern Block and Africa - EHL now truly global.

"Emeco International Europe BV, a wholly owned subsidiary of Emeco Holdings Ltd, has concluded an agreement to purchase all of the issued shares of Euro Machinery BV (Euro Machinery) and Euro Rental BV (Euro Rental).
Euro Machinery and Euro Rental are being acquired from Euro Machinery Beheer BV, a company which is ultimately owned and controlled by Mr Harry Haverkotte and members of his family.
Euro Machinery and Euro Rental are respectively in the business of trading and renting earth moving equipment. Negotiations have also been concluded for the transfer of the Euro Machinery businesses to a new state of the art machinery workshop, sales yard and office facilities in Hardenberg. The Hardenberg site is strategically located 1½ hours by road from Amsterdam and Rotterdam, provides ready access to key port facilities in the Netherlands, Belgium and Germany and being on the Dutch-German border it is considered as being on the ‘front door to Europe’. Construction of the 40,000m2 site is planned for completion in March 2007.
The acquisition of the shares of the two companies will comprise a total purchase consideration of €6,437,000, of which €2,000,000 will be paid by way of the transfer to Euro Machinery Beheer BV of shares in Emeco Holdings Ltd, which will be acquired on market immediately prior to completion. The acquisition of the businesses will be earnings accretive immediately. Earn out arrangements have been agreed which will ensure the Vendors and Emeco continue to align their interests in improving the quantity and quality of earnings of the Euro Machinery businesses over the next 3 financial years.
Under the terms of the sale agreement Mr Haverkotte and his son, Roy Haverkotte, will join Emeco’s European management team and will be involved in the group’s trading and rental activities.
The purchase of the two companies is expected to complete with effect from 1 January 2007. The company currently employs 22 staff.
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Emeco Chief Executive Officer, Laurie Freedman said, “This acquisition is strategically very important to Emeco. It gives us immediate access to an established and successful European based procurement and trading platform with trading networks into Eastern Europe, the Middle East and Africa”.
“The Euro Machinery and Euro Rental businesses have a demonstrated history of success and we are fortunate that Harry and Roy Haverkotte have agreed to continue their commitment to these businesses and become part of Emeco’s global team”, he said.
Emeco’s global presence
Mr Freedman added that “With the acquisition of the Euro Machinery businesses, we will fulfill our strategic vision of establishing a truly global presence to support our procurement and distribution capabilities. In fulfilling this goal, Emeco has also gained first mover advantage as the only significant heavy equipment rental and sales company with the capacity to meet the global needs of its customers, particularly those customer who themselves operate on a global basis.”
Emeco’s acquisition track record
The acquisition of the Euro Machinery businesses will be the third acquisition by Emeco since its IPO. In July 2006, Emeco completed the acquisition of the Bevans business based in Orange NSW. In the same month, it acquired a large package of assets from Prima International Trading (Prima) deployed under rental contracts in Kentucky and West Virginia in the USA and was assigned a number of Prima’s rental contracts.
Both the Bevans and Prima businesses have been successfully integrated into the Emeco group and both have fulfilled the strategic objectives which formed the basis of Emeco’s decision to acquire them.
Mr Freedman also commented, “With the acquisition of Bevans, the Prima assets and the Euro Machinery businesses we continue to demonstrate our capacity to successfully execute our growth strategy by acquiring businesses in markets where growth prospects are evident and where Emeco does not have a strong presence. It is also satisfying that in all of our acquisitions to date, the existing management teams have embraced the Emeco culture and have been prepared to commit to Emeco and pass on their knowledge and skills”.