MACA share move higher after takeover announcement
(Kitco News) - MACA (MLD:ASX) has completed a takeover of Downer’s Mining West business. The firm will now replace each of the four contracts with new variants. This includes a contract with Fortescue Metals Group (Eliwana iron ore mine and rail project), Citic Pacific (Sino iron project), Ansteel (Karara iron ore joint venture project) and Gold Fields and Gold Road Resources (Gruyere joint venture project).
MACA chief executive Mike Sutton said “The acquisition of the Mining West business will provide MACA with a very meaningful addition of a large scale mining fleet that is currently engaged four long-life projects, all with quality customers that are well known to me and other key members of MACA’s management team,” Sutton said.
He added “With the inclusion of Mining West, MACA now has total contracted work in hand of $3.3 billion at 31 December 2020, that provides a robust revenue base well past (the 2025 financial year). MACA remains very active with its tendering activities and is well placed to pursue a significant number of opportunities across both current and new projects.”
In terms of the financials, MACA has offered over $200 million for the acquisition, $109 million of which has been paid to Downer. The former will pay an additional $66 million through $5.5 monthly instalments over a year, with remaining balance sourced from the unwinding of working capital balances.
The MACA trend bounced back during the Asia-Pac session. There was a gap up with some significant volume behind the move. Now the bulls could look to target the highs at 1.51 and keep the trend of higher highs and higher lows going.