The Jordan Company has signed a conditional agreement to sell 534.8 million shares of International Mining Machinery Ltd. (HKSE:1683) (IMM) for a purchase price of HKD8.50 per share to Joy Global Inc. These shares represent approximately 41 per cent of the issued share capital of IMM.
An affiliate of The Jordan Company, L.P. initially invested in IMM in 2006, and on February 10, 2010, IMM priced a 520 million share public stock offering at HKD4.88 per share.
Headquartered in Hong Kong with offices in Beijing and several other mainland China cities, IMM is a former state-owned enterprise that is a leader in the design and manufacture of underground long wall coal mining equipment in China. The company offers road header products, long wall shearer products, and armored-face conveyors and related products, as well as a range of aftermarket services, including onsite service repairs, overhauls, and a supply of spare parts through a network of service centers and parts depots. IMM sells its products through independent distributors and sales agents.
“Together with the management team, we have made tremendous progress at IMM – both operationally and financially,” says Thomas H Quinn, Managing Principal of The Jordan Company, L.P. “Heilongjiang Province has been a tremendous place to do business and we have gotten great support from the local officials. From a state owned enterprise to a growing public company now being acquired by a global leader in mining solutions, IMM is a company that has been built to sustain leadership positions in the markets it serves in China. IMM is well-positioned to benefit from favorable industry trends in China and worldwide as demand for coal continues to increase.”
With the financial and operational support of The Jordan Company, L.P. and its Operations Management Group, which has had a presence in China since 1994, IMM has emerged as a comprehensive provider of long-wall underground coal mining equipment and services across China. Since the initial acquisition, IMM has completed seven add-on acquisitions and joint ventures designed to expand the products and services it offers to customers. In January 2007, IMM acquired 100% of the operating assets of Harbin Meilong Electrical Control Ltd. In June 2007, IMM established a joint venture with Huainan Long Wall Coal Mining Machinery Co., Ltd. to manufacture armored face conveyors. IMM also established three repair center joint ventures: Xinjiang Coal Mine Machinery Company Ltd. (located in Urmuqi, Zinjiang Uyghur
Autonomous Region), Tianlong Coal Mining Machinery Repairing Co. (located in Erdos, Inner Mongolia Autonomous Region), and Huainan Shunli Coal Mining Equipment Overhaul Co. (located in Huainan City, Anhui Province). Finally, in August 2010, IMM acquired 100% of Qingdao Tianxun, a supplier of electrical control systems and in December 2010, IMM announced a joint venture with Shanxi Coal Transportation for the production, sale and marketing of roadheaders and other mining machinery to the Shanxi coal mining market. Shanxi is a key coal mining province with annual coal production reaching 615 million tons.
The transaction has been approved by the Board of Directors of Joy Global Inc. and IMM. Completion of the transaction is subject to the receipt of necessary approval from the Ministry of Commerce People’s Republic of China and other customary closing conditions.
