Weir Group Plc, which makes pumps and valves for the mining and energy industries, said April 19 it had agreed to buy ESCO Corp. for $1.05 billion as it looks to bolster its mining business.

Weir also said it would start a process to sell its flow- control division, which designs and manufactures process pumps and valves for power, oil and gas industries.

The flow-control business contributed $365 million pounds in revenue, or about 15.5% of its total revenue, last year.

The 147-year-old company said its first-quarter orders rose 22%, with orders in its mining business increasing more than 13%. Oil and gas orders rose more than 50%, helped by higher demand for pressure pumping equipment in North America.

Weir maintained its full-year growth outlook for revenue and profit, on a constant currency basis.

Portland, Ore.-based ESCO, which has an enterprise value of $1.29 billion, makes parts for surface mining and construction industries, including ground engaging tools to move earth.

Equipment makers like Weir have benefited from higher commodity prices as mining companies boost spending and explore brownfield projects.

"We are acquiring a high-quality business at the right time, with the market in the early stages of its recovery, providing opportunities for long-term growth," Weir's CEO Jon Stanton said.

Weir shares rose as much as 6.6% to 2,258 pence on the news of the acquisition.

ESCO shareholders will receive 59% of the deal value in cash, the remainder in new Weir shares. Weir plans to place about 16.7 million shares, or about 7.4% of its share capital, to partly fund the deal.

"Strategically, this is the right thing for Weir to be doing," Jefferies analyst Andy Douglas said, adding that acquisition looked "very solid" and the company had not overpaid.

The company expects ESCO to accelerate Weir's portfolio development through the expansion of opportunities for parts and components for mining equipment.

ESCO is expected to generate revenue of about $675 million and pro-forma adjusted EBITDA of about $80 million in 2018. The deal is expected to add to Weir's earnings per share in the first full year post completion, expected in early third quarter, the company said.