Suppliers Roundup (July 25, 2005)

AMEC makes offer for nuclear outfit

With nuclear power undergoing a renaissance, engineering consulting firm AMEC (AMEC-L) has submitted an offer for NNC Holdings, one of the U.K.’s largest privately held nuclear services businesses.

The offer consists of $56.9 million in cash and the assumption of $28.6 million in debt, all financed via bank loans. The offer has been recommended by the NNC board and will likely be accepted by shareholders, including venture capital firm 3i with 51%, British Nuclear Fuels, 15%, and management, 34%.

NNC’s expertise runs the gamut from nuclear plant design and construction to maintenance and decommissioning. NNC lists Bruce Power and Ontario Power Generation among its clients.

Ontario’s decision to re-open nuclear generating plants has injected some life into the nuclear sector here, and with NCC, AMEC is well-positioned to grab lucrative government contracts. NNC has about 250 employees in Canada.

“NNC’s reactor services division adds a new dimension to our portfolio and, with governments across the world seeking to reinvest in the nuclear industry, we are well-placed to benefit from significant new international opportunities,” says Sir Peter Mason, chief executive of London-based AMEC.

It’s expected that governments in the U.K. will soon spend in the neighbourhood of $4.5 billion annually on operations, maintenance and decommissioning, following recent changes to legislation there.

NNC, which employs 1,000 people, provides engineering and safety consulting services throughout the life cycle of nuclear facilities in Canada, the U.K. and the former Soviet Union. The company posted an unaudited profit of $12.6 million on revenue of $194.9 million in the fiscal year ended March 31, 2005.

AMEC’s Canadian headquarters is located in Oakville, Ont., and the company operates from 164 offices in the Americas.

Reactor headed to Siberia

Vancouver-based Knelson Gravity Solutions is sending the world’s largest ConSep ACACIA Reactor to the gold-rich Sukhoy Log region of Siberia in far northern Russia.

The reactor is capable of processing between 10 and 12 tonnes per day of highly enriched gravity concentrates produced by four XD48 concentrators.

“When you see it all together and working it’s certainly an impressive piece of equipment,” says Brett Knelson, Knelson’s vice-president of business development and projects.

Knelson designed the giant reactor with help from its Australian-based processing partners ConSep.

The original ConSep ACACIA Reactor was developed in the mid-1990s at AngloGold Australia’s Union Reefs gold mine in the Northern territory. There are 30 such systems operating worldwide.

Suncor buys big trucks

Suncor Energy (SU-T) is buying about $115-million worth of heavy equipment from the Canadian division of Finning International (FTT-T). The equipment will help boost crude-oil production from the Athabasca oil sands near Fort McMurray in northern Alberta.

About one-fifth of the total deal is related to the renewal of an existing support-services agreement.

Suncor is buying nine Cat 797B off-highway trucks, which will be delivered over the next 12 months. There is also a 10-year product support agreement, and an option for six more 797Bs.

“We continue to benefit from new equipment orders as new investment is attracted to the oil sands,” says Doug Whitehead, president and CEO of Finning.

Finning is one of the world’s largest Caterpillar equipment dealers. It sells, rents, finances and supports Caterpillar equipment and engines in western Canada, the U.K., and South America. Finning also owns Hewden, the largest equipment rental business in Europe.

Arcadis acquires Greystone

Consulting firm Arcadis (ARCAF-Q), perhaps best known in the mining industry for performing feasibility studies, has entered into an asset/share purchase arrangement with Denver, Colo.-based Greystone Environmental Consultants and its namesake group of companies.

The move would give Arcadis a greater presence in environmental consulting in the U.S.

“The acquisition is an important step towards enhancing our impact-assessment, permitting, planning and ecological services offering to our clients and complements our existing environmental business in the U.S.,” says Arcadis Chairman Harrie Noy.

Greystone, which will keep its name, provides environmental planning, and science and engineering services to clients through its offices in Colorado, California, Arizona, Wyoming, and Alberta.

The firm employs 130 and had revenue of about $15 million in 2004. Other financial details were not disclosed.

Netherlands-based Arcadis is a global network of about 10,000 professionals that develops, designs and operates projects for companies and governments. It had US$1 billion in revenue last year.

Denver firm buys line, know-how

Golden, Colo.-based Denver Mineral Engineers has purchased the Custom Equipment Corp.’s line of electrowinning cells and cyanide-processing equipment support.

Custom Equipment was a pioneer in the development of equipment for processing applications such as heap-leaching and carbon-in-pulp recovery.

The acquisition strengthens Denver Mineral Engineers’ position in precious-metals electrowinning technology.

Denver Mineral Engineers specializes in the manufacture and supply of mineral processing and laboratory equipment for mining.