Orica Limited: Acquisition of Terra Insights

Orica Limited (ASX: ORI) a global leader in mining and infrastructure solutions, has confirmed the acquisition of Terra Insights for an enterprise value totalling CAD$505 million. Terra Insights, specializing in end-to-end sensors, software, and data delivery for geotechnical and structural monitoring in mining and infrastructure, presents a strategic addition to Orica's Digital Solutions portfolio.

This acquisition, anticipated to be completed in the first half of CY2024, aligns with Orica's objectives without affecting its credit ratings, maintaining pro-forma gearing within the desired range. With an implied 15.3x CY2023 pro-forma EBITDA of CAD$33 million, the deal is set to enhance earnings per share (EPS) starting from FY2025. Orica expects the return on net assets (RONA) from this acquisition to meet its medium-term target. The purchase will be financed through existing cash reserves and undrawn bank debt facilities.

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