Joy Global Inc pushes further into Chinese mining market

NEW YORK - The US mining equipment maker Joy Global Inc plans to buy an initial 41 percent stake in International Mining Machinery Holdings Ltd (IMM) for $585 million to expand in China's fast-growing coal market.

TJCC Holdings Ltd, a unit of the US private equity firm Jordan Co LP, is selling its entire stake in IMM, which makes underground coal-mining machinery.

The agreement calls for Joy Global to buy 535 million IMM shares from TJCC for HK$8.50 ($1.09) each, a 30 percent premium over its last price of HK$6.55 on July 11. Joy Global will be required to make an offer for the remaining 59 percent of IMM once the share-purchase agreement is completed. IMM posted adjusted operating earnings of $90 million in fiscal 2010, on sales of $299 million. At least one estimate saw 2011 earnings growing to about $113 million. IMM would likely add to Joy Global's fiscal 2012 earnings, several analysts said, depending on how it pays for its purchase. The company said that it will finance the purchase with a combination of cash and debt, and may issue equity.