Orica has signed an agreement with interests associated with Grupo Breca to acquire all of its shares in Breca Soluciones de Voladura and its associates' shares in Exsa.

Peru-based Exsa, which is listed on the Lima Stock Exchange, is a major manufacturer and distributor of industrial explosives. The acquisition price of Exsa is US$203 million on a debt free, cash free basis and assuming 100% acquisition.

Orica stated that the acquisition will create a step-change in its manufacturing footprint, driving competitive advantage and an enhanced position in the Latin American market, with significant synergies (approximately US$18 million) available by combining Orica and Exsa's operations.

Alberto Calderon, managing director and CEO of Orica, said: "We are very pleased to announce the acquisition of Exsa, which will immediately establish Orica as the number one player in Peru, Latin America's highest growth market, and transform Orica's entire initiating systems footprint.

"Exsa's world class initiating systems facility integrates the manufacture of almost every component of a detonator on site, providing meaningful and tangible synergies upon integration into the Orica network, with the ability to take advantage of significantly underutilised manufacturing capabilities."

By utilising latent capacity, Orica will be able to significantly increase production, transform IS manufacturing capability and serve the company's demand across the Americas.

Calderon added: "The deal also increases our exposure to copper and gold, and presents significant cross selling opportunities for us to introduce Orica's technology products and services to Exsa's broad customer base.

"The acquisition of Exsa perfectly complements our existing Latin American operations, where we already have a strong footprint.

"In addition to facilitating this acquisition, the capital raising will provide Orica with greater balance sheet flexibility to continue to invest in core capital initiatives and growth engines."