Ausdrill has completed the acquisition of underground hard rock contractor Barminco, creating the second largest Australian mining services company by revenue.
The deal, launched in August, involved Ausdrill acquiring all of the equity and equity-like instruments in Barminco in exchange for 150.7 million shares and $25.4 million in cash.
Ausdrill managing director Mark Norwell said the acquisition was a logical fit, transforming the contractor into a lower capital intensity and higher return business.
“Barminco is a complementary business to Ausdrill, with a leading market position in underground hard rock mining that establishes the company as a more diverse group with a broader service offering sought by our customers,” Norwell said.
“Not only is it a strategically and financially compelling deal, there is a good cultural fit with the two businesses having worked together in Africa through our African Underground Mining Services (AUMS) joint venture for over a decade now.”
Norwell said by bringing the businesses together their future growth opportunities were enhanced globally.
“A key focus of mine is to maximise value by effectively integrating Barminco into the Ausdrill group whilst ensuring that ongoing project delivery to our current and future customers remains the top priority,” he said.
Ausdrill and Barminco have performed in line with internal expectations so far in the 2019 financial year, with several contract wins.
Barminco has won a five-year $700 million extension at Sunrise Dam by AngloGold Ashanti, two four-year contracts at the Agnew gold mine by Gold Fields, worth collectively $335 million, and a four-year $240 million extension at the Independence Group Nova nickel-copper-cobalt operation.