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Ausdrill adds underground expertise with Barminco deal

Ausdrill adds underground expertise with Barminco deal

Photo by Bloomberg

15th August 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Mining services provider Ausdrill has made a takeover offer for joint specialist underground hard-rock mining contractor Barminco in a deal valued at A$271.5-million.

The transaction will create Australia’s second-largest mining services company.

Ausdrill will acquire all of the equity and equity-like instruments in Barminco in exchange for 150.7-million fully paid ordinary ex-dividend shares and A$25.4-million in cash.

The offer valued Barminco at A$697-million.

At the close of the transaction, Barminco shareholders will hold a 22.1% stake in the enlarged Ausdrill, with the Ausdrill shares to be escrowed until the release of the company’s full-year results for 2019.

“Given Barminco’s strength in underground mining, the acquisition would enable Ausdrill to diversify and broaden its service offering, as well as being a financially compelling acquisition,” said Ausdrill executive chairperson Ian Cochrane.

“The combination of surface and underground technical expertise will deliver a mining services business that provides a broad range of services required by our customers, while transforming the Ausdrill group.”

Cochrane said that Ausdrill and Barminco have worked together successfully for several years through their joint venture in Africa, which provides a comprehensive range of underground mining and mine management services from consulting and feasibility management through to mine development and production.

“We also have a shared history in terms of our roots in the Goldfields of Western Australia. Today we share an over-riding commitment to safety, along with the delivery of outstanding work for our customers. As a result, we are confident that Barminco can successfully be brought into the Ausdrill group.”

Barminco CEO Paul Muller noted that the two companies were a great fit, providing complementary services.

“By bringing these two businesses together and creating Australia’s second largest mining services company, we will be able to provide a broader range of services for our customers and generate additional opportunities for our employees.”

The deal was subject to a number of conditions, including Ausdrill shareholder approval and a favourable independent expert report.

Ausdrill shareholders are expected to vote on the transaction at the company’s annual general meeting in October.

Meanwhile, Ausdrill on Wednesday reported that it will undertake a fully underwritten 1-for-2.13 pro rata accelerated non-renounceable entitlement offer to raise some A$250-million, before costs.

Some 170-million new shares will be issued at a price of A$1.47 each, representing a 14% discount to the closing price of Ausdrill shares on August 14, and a 10% discount to the theoretical ex-rights price at August 14.

The raising is being undertaken in order to reduce pro-forma gearing, Ausdrill said.

Net proceeds from the raising will be used to partially fund the repayment of notes due in November next year.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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