TIDMWEIR
RNS Number : 4943R
Weir Group PLC
05 November 2021
Weir to acquire Artificial Intelligence and Machine Vision
technology leader Motion Metrics
The Weir Group has agreed to acquire Motion Metrics, a leading
Canada-based global mining technology business, for an initial
consideration of GBP89m(1) payable in cash upon completion, subject
to customary net debt and working capital adjustments.
Motion Metrics is the market leading developer of innovative
Artificial Intelligence (AI) and 3D rugged Machine Vision
Technology used in mines worldwide. Its technology helps miners
increase safety, efficiency and sustainability of their operations.
As part of the agreement, Motion Metrics Vancouver headquarters
will become Weir's global centre for excellence in AI and Machine
Vision technology.
Motion Metrics applications are highly complementary to Weir's
product portfolio. It will join the ESCO division reflecting the
early adoption of its technology in ground engaging tools (GET)
where ESCO is an established global leader. Motion Metrics AI and
Machine Vision capabilities are expected to be leveraged across the
whole mining value chain served by the Weir Group.
Transaction highlights
-- Strengthens Weir's industry leadership in making mining
more sustainable and efficient
-- Significantly increases the Group's capability in critical
AI and Machine Vision Technologies
-- Fully aligned to ESCO's ambitious growth strategy through
further digitisation of its portfolio
-- Enables rapid globalisation of Motion Metrics technology
through Weir's global network
-- Highly complementary to Weir's aftermarket-focused business
model
In 2021, Motion Metrics generated revenues of GBP9m(1) and was
modestly profitable. Initial integration efforts will focus on
leveraging Weir's global sales network and the ESCO division's
large installed base to rapidly expand adoption of this value
enhancing technology by our mining customers thereby driving
significant revenue growth. Motion Metrics is expected to be
accretive to ESCO's margins by 2023 with returns expected to exceed
the Group's cost of capital by 2024 in line with Weir's capital
allocation policy. Up to a further GBP59m(1) will be payable in
cash by Weir at the end of 2024, depending on revenue and profit
performance. The transaction will be funded through cash and
existing banking facilities. Over the next two years integration
costs are expected to total GBP3m.
Jon Stanton, Weir Group CEO said:
"The combination of Weir and Motion Metrics will be extremely
powerful and reflects our ambition to play a leading role in
mining's technology transformation. Motion Metrics not only
provides access to innovative and highly relevant technology that
will accelerate growth in our ESCO division, but it also brings
world-class expertise in AI, rugged 3D Machine Vision technology
and data science that is applicable across the Group. This
acquisition is fully aligned with our strategy and our commitment
to grow ahead of our markets, expand our margins and significantly
reduce our customers' environmental footprint."
A leading mining technology business specialising in AI and
Machine Vision applications
Miners are increasingly focused on improving the safety,
efficiency and sustainability of their operations. Motion Metrics
has developed proprietary products and solutions that supports
these critical ambitions leveraging innovative Machine Vision,
distributed AI and machine learning.
Motion Metrics produces smart, rugged cameras that monitor and
provide valuable and timely data on equipment performance, faults,
payloads and rock fragmentation. This data is then analysed using
embedded and cloud-based machine learning to provide real-time
feedback to the mining operation. This enables immediate
identification of potential issues that could impact safety and
cause expensive unplanned downtime. This includes boulder and
foreign body detection to dislodged ground engaging tools that can
critically damage crushing equipment if undetected. It also
provides information that can be used to optimise asset efficiency,
supporting better decision making as miners seek to increase
productivity while reducing energy consumption, particularly in
areas such as comminution (crushing, screening and grinding), one
of the most energy-intensive processes in mining.
These technologies were initially developed for GET applications
but have recently been extended into a suite of products and
solutions that can be applied from drill and blast through to
primary processing. Motion Metrics technology is currently used on
more than 80 mine sites and its customers include some of the
world's largest mining companies. Its revenues are generated from
the initial sale of equipment and subsequent recurring aftermarket
revenues including subscriptions to its cloud computing platform,
services and spare parts; a model that is highly complementary to
Weir's aftermarket-based business model.
Motion Metrics was founded in 1999 by Dr. Shahram Tafazoli. In
addition to its headquarters in Vancouver, Canada, Motion Metrics
has offices in Chile, Australia, Brazil, Russia and South Africa.
The business employs c.125 people focused largely on research and
development, alongside sales and field support. Dr. Tafazoli will
continue to lead the business when it joins the Weir Group,
overseeing the new Weir centre for excellence in AI and Machine
Vision technology. Weir's existing Canadian operations employ c.600
people and include manufacturing facilities as well as sales and
service centres.
Motion Metrics Founder, Dr. Tafazoli said:
"Motion Metrics was established to harness the power of AI and
Machine Vision to help the global mining industry make its
essential transition to safer, more productive and sustainable
operations. Having proven our technology and grown rapidly over
recent years, the time is right for us to accelerate our
development as part of the Weir Group, which brings access to every
major mining region in the world, from pit to plant. I am also
excited to establish in Canada a global centre of excellence for AI
and Machine Vision for mining applications, reflecting Canada's
domain expertise in both mining and machine intelligence."
Motion Metrics will become part of Weir's ESCO division, with
its extensive team of researchers, data scientists and engineers
also supporting the increased digitisation of the broader Weir
product portfolio.
Accelerating ESCO's growth strategy following its successful
integration into the Group
ESCO was acquired in July 2018 and the business has been
successfully integrated into the Weir Group over the past 3-years.
Cost synergies in excess of US$30m were realised ahead of schedule
and the business is on track to surpass its acquisition margin
targets. Despite the impact of the COVID pandemic on market
conditions over the past 18-months, returns on capital employed
will exceed the Group's cost of capital in 2021, in line with the
Group's capital allocation policy.
Moving forward, ESCO's focus is on accelerating growth through
geographic expansion and the continued extension of its market
leading front-of-shovel offering, creating new solutions to support
customers' safety, efficiency and sustainability goals. Motion
Metrics is fully aligned to this strategy, including the early
realisation of the digitally instrumented smart bucket concept
which provides information on bucket and GET health alongside
payload and ore fragmentation analysis. Combining ESCO's deep
knowledge of mining operations with the data-led insights from
Motion Metrics' AI capabilities will enable the business to create
new solutions that integrate and extend the technological
differentiation of its best-in-class offerings across the mine.
Andrew Neilson, Division President of Weir ESCO commented:
"This is a perfect partnership. Our customers want more digital
solutions to help them improve safety, efficiency and
sustainability and providing these is a key part of our growth
strategy. Motion Metrics brings patent-protected technology that
reduces expensive downtime in GET applications, helping improve
ESCO's differentiated technology offering even further. The
additional capability in AI and Machine Vision will also accelerate
our expansion into adjacent markets including developing smart
eco-system offerings encompassing the load and haul operations of
our customers."
The acquisition is expected to complete in the fourth quarter of
2021.
Notes:
1. Exchange rate of GBP1 = CAD$1.683 at closing in London on 4
November 2021.
Enquiries:
Investors: Stephen Christie +44 (0) 141 308 3781
Media: Citigate Dewe Rogerson: +44 (0) 207 638 9571
Chris Barrie / Kevin Smith Weir@citigatedewerogerson.com
-------------------------------
About The Weir Group PLC
Founded in 1871, The Weir Group PLC is one of the world's
leading engineering businesses with a purpose to make its mining
and infrastructure customers' operations more sustainable and
efficient. Weir's highly engineered technology enables critical
resources to be produced using less energy, water and waste while
reducing customers' total cost of ownership. The Group is ideally
positioned to benefit from structural trends that support long-term
demand for its technology including the need for more essential
metals to support economic development and carbon transition. The
Group has c.11,000 employees operating in over 60 countries with a
presence in every major mining region of the world. Find out more
at www.global.weir.
Weir's ordinary shares trade on the London Stock Exchange
(ticker: WEIR LN) and its American Depositary Receipts trade
over-the-counter in the USA (ticker: WEGRY).
About Motion Metrics International Corp.
Founded in 1999 Motion Metrics is a leading provider of AI and
rugged Machine Vision technology to global mining markets. Its
suite of patented products provides image and sensor-based
automatic monitoring and analysis for applications such as
equipment and wear monitoring, rock fragmentation sensing, boulder
detection and payload weight and volume analysis. Motion Metrics
innovative technology is used on more than 80 mine sites around the
world and enables mine operators to optimise the safety, efficiency
and sustainability by helping prevent costly unplanned downtime.
Its solutions are used in a variety of applications from drill and
blast through to minerals processing. The business is based in
Vancouver, Canada and has sales offices in a number of major mining
regions including Chile, Australia, Brazil, Russia and South
Africa. For further information, please visit
www.motionmetrics.com.
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