Barminco to be acquired by Ausdrill

15-Aug-2018 Intellasia | | 8:05 AM Print This Post

Leading underground hard-rock mining contractor Barminco Holdings Limited (Barminco or the Company) is pleased to announce it has entered into an agreement to be acquired by ASX-listed diversified mining services company Ausdrill Limited (ASX: ASL).

Ausdrill will acquire all of the equity and equity-like instruments in Barminco, and assume Barminco’s debt, in exchange for 150.7 million fully paid ordinary ex-dividend Ausdrill shares and $25.4 million in cash. Of note, it is intended that Barminco’s US$350 million Senior Secured Notes, issued in April 2017 and due for repayment on 15 May 2022, will remain on issue.

The transaction is equivalent to an equity acquisition price of $271.5 million[1] and an enterprise value of $697.0 million[2].

Barminco shareholders will own 22.1 per cent of the fully paid ordinary shares in Ausdrill post-completion of an associated Ausdrill equity raising and closing of the transaction, remaining shareholders in the combined business under set escrow periods. In addition, Barminco Non-Executive Chairman Keith Gordon will join the Ausdrill board following completion.

Barminco Chief Executive Officer Paul Muller said:

“Barminco and Ausdrill are a great fit, with the businesses providing complementary services and having worked together for a decade through our AUMS joint venture.

“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.

“Barminco had a strong 2018 financial year and our focus is to continue safely delivering results for our customers.”

Barminco released its FY2018 results yesterday, reporting Revenue of $731.9 million, Earnings Before Interest and Tax (EBIT) of $90.6 million, and a Net Profit After Tax of $38.6 million (all including Barminco’s 50% share of AUMS)[3]. The Company currently operates at 11 projects in Australia and 2 overseas (Egypt and India), with AUMS operating at a further 5 projects in Africa. Barminco employs 1,800 people with an additional 1,000 people employed with AUMS. Barminco’s FY18 results presentation can be found here.

The transaction is subject to a number of conditions precedent, including Ausdrill shareholder approval, no material adverse change to Barminco or Ausdrill, a favourable independent expert’s report, continuation of material contracts and required change of control consents.

Full details of the transaction can be found in Ausdrill’s announcement to the ASX, found here.


[1] Assuming Ausdrill equity is valued at the Theoretical Ex-Rights Price (“TERP”) of $1.63. The Theoretical Ex-Rights Price (“TERP”) is the theoretical price at which Ausdrill shares should trade after the ex-date for the Entitlement Offer. TERP is a theoretical calculation only and the actual price at which Ausdrill shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not be equal to TERP. TERP is calculated by adjusting for the bonus-element of the Entitlement Offer based on the closing price of Ausdrill shares on Tuesday 14 August 2018.

2 Assuming Barminco net debt, including the mark-to-market value of derivative financial instruments, of $421.3 million as at 30 June 2018. This balance excludes shareholder-associated debt that will be extinguished as part of the purchase consideration.

3 EBIT and NPAT includes normalisations for shareholder management fees.


(Source: FTI Consulting, Strategic Communications Perth)


Category: FinanceAsia

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