Milwaukee, US-based mining equipment company Joy Global has sought to add revenue through the purchase of Montabert SAS, a French business that produces heavy equipment for hard rock mining and excavation. Joy paid $124 million for Montabert, which generated about $100 million in net sales in its most recent fiscal year.
"Despite tough markets, we remain committed to taking prudent actions to improve our business during this cyclical downturn and bolster our strategic position to be a first tier supplier to the underground hard rock mining market. In this regard, we are pleased to announce our acquisition of Montabert SAS from Doosan Holding France SAS,” said Joy’s president and chief executive officer Ted Doheny.
“Montabert specializes in the design, production and distribution of high quality hydraulic rock breakers, pneumatic equipment, drilling attachments, drifters and related parts and tools. This acquisition represents an important step in expanding product and service capabilities for hard rock mining, tunnelling and rock excavation, further diversifying the company's commodity and end market exposures. The Montabert product line will complement our existing fleet of hard rock equipment and leverages our global service centre infrastructure.”
The slowdown in coal and copper mining, combined with low commodity prices, dragged down sales of Joy equipment in the second quarter of 2015, the company said last week.
For the 2015 second quarter ended in May, Joy Global net income was $38.7 million, a decline of 48% compared with $74 million in the second quarter of 2014. Net sales slumped 13% to $810 million, compared with $929 million in the same period a year ago.
Joy Global’s underground mining division, which produces and sells equipment to extract coal, potash, salt, platinum and other materials, accounted for much of the sales decline.
“The company’s fiscal second-quarter results reflect increasing pressure on our end markets from continued oversupplied conditions and sequentially declining commodity pricing,” said Ted Doheny.
“While our operational execution in the quarter was in line with our expectations, the incoming order rate, in particular in the US coal and global copper markets slowed as customers further reduced capital expenditures and deferred maintenance on their mining equipment fleets.
“We continue to invest in our service business to respond quickly and more efficiently to our customer’s needs and are taking steps to accelerate the optimization of our global manufacturing and service footprint.”
Joy Global employs about 15,400 workers around the world, including its three surface mining equipment production operations in Milwaukee.
Lower commodity prices and a drop in capital investment across the mining industry have cut into company revenue since 2012, when the company recorded $5.7 billion in sales. In 2014, Joy Global reported sales of $3.8 billion.