Orica takes lead in Latin American explosives market

Chemicals and explosives group Orica will take the lead in the Latin American explosives market buying Exsa, Peru’s leading manufacturer and distributor of industrial explosives.

Orica will pay $302 million to penetrate the region’s fastest growing market and create a step-change in the company’s manufacturing footprint.

As part of the deal Orica will integrate into its global manufacturing footprint Exsa’s new, state of the art initiating systems (IS) manufacturing facility.

By utilising unused capacity, Orica will significantly increase production, transforming IS manufacturing capability with potential to serve growth in demand.

The acquisition price represents an expected acquisition multiple of seven times 2019 EBITDA, and offers synergies with the Melbourne company’s existing businesses.

The acquisition will be funded through a capital raising, which will also provide funds to give greater balance sheet flexibility and support investment in Orica.

Orica CEO Alberto Calderon said: “We are very pleased to announce the acquisition of Exsa, which will transform Orica’s entire initiating system footprint.

“Exsa’s world class initiating systems facility integrates the manufacture of almost every component of a detonator on site, providing meaningful and tangible synergies.

“The deal also increases our exposure to copper and gold, and presents significant cross selling opportunities for us to introduce Orica’s technology, products and services to Exsa’s customer base.”

Picture: Exsa

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