Powerscreen International, the Northern Ireland engineering group that went to the brink of bankruptcy last year following accounting irregularities at one of its subsidiaries, is being taken over by the US engineering group Terex for £181 million sterling (€277 million). The acquisition had been expected since Powerscreen announced in April that it was in take-over talks. Terex was always seen as a front-runner to buy Powerscreen given the complementary nature of their respective businesses.

The price tag (195p sterling per share), which has been recommended by the Powerscreen board, is in line with expectations and is a multiple of almost eight times Powerscreen's after-tax profits for the year to the end of last March.

The sale to Terex will bring to an end a long-running saga which saw Powerscreen move from being one of the blue-chip industrial companies on the Irish stock market to a virtual investment pariah after accounting irregularities, which falsely boosted profits, were discovered at its Matbro subsidiary.

This resulted in Powerscreen moving from a strong profit position to a loss of £47.6 million sterling and led to a collapse in its share price from a 1997 peak of 763p sterling to just 52p in mid-1998.

A new management team, headed by Mr Brian Kearney, was installed to replace those who were in place at the time of the irregularities at Matbro - chief executive, Mr Shay McKeown and finance director, Mr Barry Cosgrove.

An investigation by Britain's Serious Fraud Office into the accounting irregularities is continuing. The new management team had the task of reviving Powerscreen and proceeded to sell off a series of non-core businesses for a total of more than £51 million sterling, a move that turned Powerscreen's balance sheet around from a position of net debt of almost £53.4 million at the end of March 1998 to little more than £3 million at March 1999.

The sale of the assets and the concentration on the core screening, crushing and materials' handling business has transformed Powerscreen, and results for the year to the end of March 1999 show pre-tax profits of £38.4 million sterling on sales of £225.1 million sterling from the continuing businesses. Operating profits from the continuing operations were £25.2 million sterling, after-tax profits were £23.9 million sterling and earnings per share were 25.8p.

Investors generally will be happy that they are finally going to get some return from Powerscreen.

But Irish institutions which bought three million shares in a placing, at 625p each, a matter of weeks before the Matbro debacle are undoubtedly feeling sore, especially as it later emerged that some senior Powerscreen executives were apparently aware of the irregularities at Matbro when the shares were placed.

The Powerscreen business itself is an ideal fit with Terex, with both companies selling their products to the mining and earth-moving industries.

Terex, based in Connecticut, had sales of $1.23 billion (€1.18 billion) and after-tax profits of $34.5 million. Sales in the current year are expected to be in the order of $1.6 billion.

Since 1995, Terex has spent $460 million on acquisitions, including Powerscreen. Terex chairman and chief executive, Mr Ron DeFeo, said: "Powerscreen provides Terex with leading market positions in the markets for screening, crushing and materials' handling equipment and significantly extends the range of products we are able to offer our customers."

Mr DeFeo added that he expected to generate substantial cost savings over the next six months as the Powerscreen businesses were integrated into the Terex lifting and earth-moving divisions.

It is not expected that there will be any impact on the Powerscreen operations in Northern Ireland and the Republic.

Mr DeFeo said: "The workforce of Powerscreen has a major role in Terex's plans for growing the company's business."

The sale brings to an end speculation that the Sean Quinn Group might bid for Powerscreen, speculation that intensified after its Quinn Direct subsidiary built up a 6 per cent stake late last year.

Trading in Powerscreen shares was heavy yesterday but the shares did not trade above the 195p offer price from Terex, indicating that the market does not believe any counter-bid will emerge.

Terex already has acceptances in respect of 13.1 per cent of Powerscreen shares.

Mr Sean Quinn, however, is sitting on a healthy profit from his investment, which took place late last year when the shares were trading at around 80p sterling.

That price would suggest that Mr Quinn has made a profit of more than £6 million sterling on his investment in the group.