Ditch Witch acquires Astec trenching & trenchless businesses
By Chris Sleight13 November 2012
The Charles Machine works, which markets equipment under the Ditch Witch brand, has acquired American Augers and Trencor’s large trencher product line from Astec Industries for US$ 55 million in cash. The deal does not include American Augers’ vertical oil & gas drill rig range and the four-track surface miners made by sister company Astec Underground. The businesses being sold had revenues of US$ 42 million for the nine months to the end of September this year.
Commenting on the sale, Astec chairman & CEO, Dr Don Brock said, “We acquired the Trencor operation in 1988 and American Augers in 1999. These businesses have been very cyclical through the years. Our strategy has been to buy and grow companies. However, we sold our utility trencher and drill line to Toro earlier this year, and the opportunity became available to sell American Augers and the Trencor line of large trenchers at Astec Underground.”
The deal is expected to close by the end of the year.
Astec has also announced a special one-off dividend of US$ 1.00 per share, payable on December 12. “We have maintained a strong balance sheet for several years but have not found the right acquisitions in which to invest our excess cash,” said Dr Brock. “While acquisitions are still a high priority for us, the Board of Directors decided to declare a special one-time dividend as a tangible return of value to our shareholders while the tax rates are still advantageous.”