Bradken Ltd kicked up on Tuesday its annual earnings guidance from the previous financial year of $169.1 million and revealed that it will raise $65 million to buy Canada's Almac Machine Works as it hopes that better turnovers from its rail division would help propel the company beyond the profits it had amassed last year.

The mining company, which also provides engineered services, is set to acquire the Alberta-based manufacturer of mining and oil products by early July and would give Bradken fresh access of products in the upbeat Canadian resources markets plus an operating base to disperse its existing products in North America.

The deal would also require Bradken to shell out another $5.2 million once Almac had reached normalised revenue of $55 million by calendar 2010, as company managing director Brian Hodges gave assurance that "the acquisition of Almac is in line with Bradken's strategy of building a substantial presence in the world's major mining regions and globalising its consumable products businesses."

The Canadian acquisition will be integrated with Bradken's resources division with an expected realisation of $500,000 synergies and projected accumulation of three percent earnings per share on its first full financial year.

A $50 million institutional placement of ordinary shares would fund the Almac purchase which is fully underwritten by Merrill Lynch, with plans of share purchase offerings that would allow qualified shareholders to buy up to $5,000 worth of new shares that could gather additional $15 million.

The company is confident that the acquisition and equity fund raising would place Bradken on a strong position to explore on future growth opportunities as parts of the proceeds from shares offering could also be used to slash its net debt which stood at $326.3 million as of December 31 with a gearing level of 46.3 percent.

Bradken is also upbeat that its rail division would experience growth from the sustained productivity improvements operations in Xuzhou, China as it noted that the company is currently enjoying continues purchase spikes and all Bradken's divisions are seeing expected improvements from the global financial crisis.

Despite entering a trading halt in the market and its shares last selling at $7.25, the company said that, "Bradken remains comfortable with the outlook for the core Bradken business, with signs of recovery in the US-based engineered products division."