Incitec Pivot eyes expansion with $142m deal to buy Titanobel

Incitec Pivot plans to expand its Dyno Nobel business in Europe and Africa after striking a $142m deal to buy French explosives manufacturer Titanobel.

Incitec Pivot CEO Jeanne Johns said the acquisition of Titanobel would fuel the company’s growth. Picture: Aaron Francis

Australian multinational corporation Incitec Pivot has inked a €91m ($142m) deal to buy French explosives manufacturer Titanobel.

The deal announced on Monday will be funded by existing cash and debt reserves and represents an expected acquisition multiple of 7.8 times fiscal-year 2020 earnings before interest, taxes, depreciation and amortisation.

Incitec Pivot said the takeover would be complementary to existing operations and provide access to new markets where its Dyno Nobel commercial explosives business could leverage is premium technology via substitution and growth strategies.

Titanobel is a major player in the industrial explosives manufacturer and drilling, blasting and technical services sectors based in France. It has a large customer base in the European market with exposure to the quarry and construction sector and the African hard rock sector.

The agreement has been well received by investors with shares in Incitec Pivot finishing 2 per cent higher on Monday to $3.36.

Incitec Pivot managing director and CEO Jeanne Johns said Titanobel’s acquisition would fit well with the company’s strategy of taking its core explosive business to new markets.

“We are excited for the potential to service new clients and partners with our market leading technology,” she said.

“The ability to build on Titanobel’s rich history, market position and regional presence is an exciting chapter in our growth journey, and we look forward to welcoming the Titanobel team to Incitec Pivot.”

The transaction remains subject to the satisfaction of key milestones and conditions, including the French employee works council consultation process, and Incitec Pivot receiving foreign direct investment regulatory approval from the French Ministry of Economy and Finance.

Incitec Pivot intends to leverage existing manufacturing footprint, the skills and experience of Titanobel’s existing workforce, and to enhance their offering through the introduction of the Australian company’s technologies.

The Melbourne-based company said overtime Incitec Pivot’s technologies would be expanded into other markets in the Europe, the Middle East and Africa region.

Incitec Pivot’s acquisition of Titanobel comes weeks after the company secured a $29.4m deal to ramp up production of refined urea needed for the supply of the diesel exhaust fluid AdBlue, after a shortage threatened to derail the trucking sector.

The agreement with the Incitec Pivot will lead to Australia producing all the technical-grade urea it needs each month to make the fuel additive AdBlue, which is used by trucks and diesel-powered cars.

The AdBlue deal has been a gold mine for many investors with shares in Incitec Pivot up by 10.1 per cent in the past month alone, adding to a 38.7 per cent rise in the past six months.