Scott Technology considers buying conveyor systems maker
BUDSINESSDESK: Dunedin-based industrial automation firm Scott Technology has taken a stake in a Western Australian developer of a patented conveyor belt technology of use in the mining, bulk handling and automated processes markets.
For an initial commitment of less than $A500,000, the company has bought assets belonging to Integrated Conveyor Systems ahead of a due diligence process that will take until at least next June, with an option for extension.
The process will also tease out a final valuation for the company, Scott chief executive Chris Hopkins told BusinessDesk.
"ICSL's conveyor technology is a logical extension for Scott with our progress in the mining automation market, where the technology is aimed at improving speed, occupational safety and health and labour costs, particularly in remote areas or over difficult terrain," says Hopkins and chairman Stuart McLauchlan in a statement to the NZX.
Its application for the mining sector is still in the development phase, although it is in testing with an Australian mining company, and has attracted inspection by Bathurst Resources, which is planning a conveyor system to bring coal off the Denniston Plateau for export from Westport, Mr Hopkins says.
"It's an enclosed system with some unique properties for specialist applications that puts it in a different league."
ICSL had been keen to move at speed, meaning the unorthodox due diligence process with a view to likely purchase, which Scott expected to be able to fund from cashflow and existing bank facilities.
NZX-listed Scott is due to report its annual earnings on October 10. Its shares were up 2.9% today to $1.80 and have risen 24% in the last year.