Brisbane, 3 December 2007: Austin Engineering Limited (ASX trading code: ANG) today announced a major international expansion with the acquisition of U.S.-based Western Technology Services International Inc (Westech) for $US19 million. The purchase of the business, based in Casper, Wyoming in the U.S., includes $US13.8 million of property, plant and equipment and other net assets. The purchase price is equivalent to a multiple of 3.2 times forecast earnings before interest and tax for financial 2007-08. It represents Austin’s largest expansion since the company listed on the ASX in 2004. Austin Chairman Peter Fitch said the Westech acquisition would provide Austin with an excellent platform to target the strong resources markets of North and South America and Canada. It also presented the opportunity to acquire the intellectual property behind Westech’s design for market-leading lightweight off-highway dump truck bodies, which it licences to companies including Austin. Established in 1938, Westech serves the resources sector in North and South America and Canada with products including dump truck bodies, cable reels and dragline and shovel buckets. It has forecast revenue of $US36 million and earnings before interest and tax of $US6 million for its financial year 2007-08 commencing on 1 November 2007. Westech’s lightweight body design is world leading technology, allowing trucks to carry more pay load and increase productivity - a strong attraction for major mine operators. Mr Fitch said Westech’s business was well understood by Austin as its model and operating structure were similar to that used by Austin’s JEC Mining & Earthmoving division in Australia. It also has some processes and clients in common with Austin. “The Westech acquisition represents a significant point in Austin’s expansion and development,” Mr Fitch said. “We now own both a robust and well established business in the world’s biggest mining and resources market and the intellectual property to a world-recognised dump truck body design that is employed in all the major mining nations.” Westech’s existing management has agreed to stay with the business, ensuring there is minimal disruption from the change in ownership. “We expect that synergies between the businesses will lead to savings on the procurement of materials and will assist in expanding the product range of both companies,” Mr Fitch said. “Significantly, the purchase will give us the opportunity to approach the major mining OEMs (Original Equipment Manufacturers) and mine operators around the world as a ‘one-stop shop’. “Another benefit is the expansion potential of the business in South America and Canada from leveraging our current mining products business model,” he said. Mr Fitch said Austin would fund the Westech deal from bank debt and existing cash resources. There are no plans to raise capital for this acquisition, which continues Austin’s recent expansion through purchases including Austbore Pty Ltd and Kaldura Industries in Mackay.
