Astec Industries is set to expand its offering after confirming a definitive agreement for the acquisition of TerraSource.
The definitive agreement was confirmed at the reveal of Astec’s first quarter results where Astec chief executive officer Jaco van der Merwe broke the news.
“TerraSource is a manufacturer and distributor of similar equipment, serving adjacent markets in materials processing equipment and related aftermarket parts,” he said.
“They have annual revenues in excess of $150 million, a strong portfolio of industry leading brands and a track record of high performance. TerraSource adds significant growth and value creation opportunities including new markets, aftermarket parts and accretive margins. We look forward to having the hard-working TerraSource employees join the Astec team.”
Astec Industries chief financial officer Brian Harris said the acquisition was a result of the company’s definitive growth strategy.
“It will add scale, improve our aftermarket parts mix, expand our margins and quality of earnings and is expected to be accretive from day one,” he said.
“Excluding the pending acquisition, we reiterate our adjusted EBITDA full year guidance range of $105 million to $125 million.”
Right Lane Industries confirmed it had agreed to sell TerraSource to Astec Industries for a purchase price of $245 million.
TerraSource is headquartered in St Louis, Missouri and specialises in material handling equipment and related aftermarket parts and services for crushing and separating applications.
“Congratulations to our exceptional colleagues at TerraSource, Right Lane, and Hillenbrand for this successful collaboration,” TerraSource chief executive officer Kevin Hambrice said.
“The transformation journey has been remarkable, and I’m confident our partnership with Astec will enable us to continue our extraordinary trajectory, further enhance our market leadership, and deliver exceptional products and services to our customers.”
The announcement comes after Right Lane Industries gained a 51 per cent stake in TerraSource from Hillenbrand Inc in 2021.
“The partnership with Right Lane was the right choice for us and has positioned TerraSource very well for continued growth,” Hillenbrand chief executive officer Kim Ryan said.
“We are confident that TerraSource will continue to flourish under Astec’s ownership, and we wish them every success.”
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