Downer gets $100m-plus bid for MinTech; management not ready to deal

afr.com:

Downer EDI’s asset spin-off spree has hit a speed bump, while its investors reel from last week’s profit hit.

Street Talk understands Downer’s adviser, Barrenjoey, has been negotiating a $100 million-plus bid for its minerals processing unit, Mineral Technologies, with Perth-headquartered AvidSys Group.

AvidSys was the last suitor standing at Mineral Technologies, which Downer began shopping around earlier in the year. Sources said the suitor had put a decent bid on the table and the two camps held extensive talks.

Downer EDI chief executive Peter Tompkins took over from Grant Fenn earlier this year.  Michael Quelch

However, Downer’s freshly installed management wasn’t ready to deal and chose to park the process, for now. Mineral Technologies was pitched as the world leader in fine physical mineral separation solutions, including spiral gravity concentrators and magnetic and electrostatic separation technology via its Cararra and Reading brands respectively.

It has been around since the 1950s and is used by iron ore, mineral sands, silica sands, coal, chromite, gold, tin, tungsten and tantalum producers.

Its prospective buyer, AvidSys, is no stranger to carving assets out of Downer. Two years ago, it bought Downer’s mining services provider Open Cut Mining East for about $150 million.

While Downer’s management makes up its mind on Mineral Technologies, its shareholders are also waiting for a payday from the sale of its waste management business, Repurpose It.

Florida-headquartered private equity investor I Squared Capital emerged as the preferred bidder for Repurpose It back in June with a circa $250 million offer. But I Squared hasn’t yet signed a deal and sell-side adviser Barrenjoey was understood to be still churning