Australian premiere drilling contractors DDH1 and Swick Mining Services have announced a friendly merger earlier this week. The new combined entity will have 170 rigs, the largest fleet in Australia.
‘Partnering with the leading underground diamond driller in Australia is a natural evolution to our specialized surface drilling operations and in line with the disciplined growth strategy we unveiled as part of our ASX listing in March 2021,’ said DDH1 managing director Sy van Dyk.
The merger will combine Swick’s expertise in underground drilling with DDH1’s famous surface business with a mix of 40% underground and 60% surface exposure. The resulting entity would have revenues in excess of AUD 445 million and EBITDA of AUD 103 million (based on the combined results of each company for the fiscal year 2021). With such results, the merged company will join Australia’s stock exchange Top 300.
‘We have grown Swick to become the largest underground drilling contractor in Australia with a market leading position, defined by solid margins and established top tier clients throughout the years both in Australia and internationally,’ said Kent Swick, Managing director and founder.
As part of the early, non-binding and conditional proposal, DDH1 will offer Swick shareholders 0.297 shares for each share they hold, putting the value of the company at AUD 115 million. In total, Swick shareholders will receive 19.7% of the new entity.
It is not yet clear when the merger proceedings will conclude and whether there will be any changes to management.
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