RungePincockMinarco (RPM) has taken over asset management software company iSolutions.
The initial deal has been valued at $8 million, with RPM funding the acquisition through cash reserves, followed by further post completion earn-out payments of $6.5 million over three years based on growth in sales and annuity revenue.
RPM will also issue 9,166,66 of its own shares in a scrip offer to outgoing shareholders of iSolutions – valued at 60 cents per share (approximately $5.5 million) – which will be held in escrow for 12 months.
The transaction is slated to close July 1.
iSolutions’ asset management software tracks and manages the repair and maintenance of more than half of the world’s large mining equipment – such as loaders, haul trucks, dozers and the like – from the largest OEMs.
It is also used to extend the functionality of enterprise resource planning systems, with Glencore, Newmont, Anglo American, and Newcrest as well as contractors like Downer and HSE Mining some of its major users,
Commenting on the acquisition, RPM managing director Richard Mathews stated “mining is a very capital intensive industry and mobile mining equipment that moves material makes up a large proportion of capital and operational spend for every mining company; as they push to drive costs down it’s this area that presents the best opportunity for additional savings”.
RPM added, “While there are many economic variables mining executives cannot control, like global exchange rates and commodity prices, one cost they are firmly in command of is the maintenance and life cycle management of their large mining equipment and the productivity they derive from this, this represents the largest cost to mining.”
Mathews went on to state,“With the combined expertise of iSolutions and RPM there is no software company in the world that has a better in-depth knowledge of the real costs associated with maintaining these essential pieces of equipment and the optimisation of the maintenance strategies by which these costs can be minimised within mining.”
Co-founder of iSolutions, Graeme Elgie, said the company is impressed with RPM’s software vision.
“We are convinced that the iSolutions product will benefit from increased investment and the sales and marketing support which RPM can offer; as evidenced by the structure of this deal and the consideration we have accepted for RPM shares, we firmly believe in this complementary combination of the two product suites and management teams.