GE, of Fairfield, Conn., also signed a letter of intent to buy Fairchild International, a family-owned maker of underground mining equipment located in Glen Lyn, Va., for an undisclosed sum.

"The combination of the two entities expands GE's product offering to address approximately 35% of the underground mining value chain," GE said late Tuesday, May 15. "Industrea Ltd. and Fairchild International together are well positioned in dynamic growth regions for mining, including Australia, China (Industrea), and the United States (Fairchild)."

GE CEO Jeff Immelt has spent heavily to expand his company's presence in the mining and energy sector, striking about $11 billion of deals over 2010 and 2011, headlined by a $3.2 billion deal for privately owned energy infrastructure group Converteam SAS and the $2.8 billion acquisition of John Wood Group plc's well support unit. Following that spending spree Immelt said that he would focus on smaller deals to gain access to specific technologies.

GE will pay A$1.27 per share for Sinnamon Park, Queensland-based Industrea, a 48% premium to the company's closing price on Monday. Shares in Industrea closed Wednesday at A$1.23, up A$0.37, or 43%. The deal values the target's equity at about A$470 million and, based on the A$700 million enterprise value, equates to about 5.6 times the target's 2011 Ebitda.

The deal gives Industrea the right to sell its Industrea Mining Services unit prior to completion of the takeover, with cash from the sale to be returned to shareholders. Industrea CEO Robin Levison told a conference call that GE was mainly interested in its mining-equipment operations and that another buyer might be willing to pay more for the service unit.

If the unit is sold for more than its value in the GE offer then Industrea shareholders will receive an additional payment. If it cannot be sold then it will be included in the GE takeover, with no adjustment to the offer price. GE and Industrea did not say what value the partners had placed on the service unit within their existing deal.

Industrea makes equipment used in underground mining operations, including flame- and explosion-proof vehicles and drill guidance systems. It made A$124 million of Ebitda in 2011 from sales of A$4357 million.

Fairchild International is a maker of underground coal mining equipment, including battery-powered scoops, which GE believes it can market beyond Fairchild's existing U.S.-centric customer base.

The two businesses will be integrated into GE Transportation, the company's global mining unit.

Shares in GE closed Tuesday at $18.40, down $0.20, or just over 1% on their previous close.

Record Point's Michael Firmin is acting as financial adviser and Norton Rose Australia as legal adviser to Industrea. UBS is advising GE, and King & Wood Mallesons is its law firm.