CIMIC Group says it has entered into an agreement with funds advised by Elliott Advisors (UK) Ltd regarding the acquisition by Elliott of a 50% equity interest in Thiess, a leading mining services provider.
Elliott is one of the oldest fund managers of its kind under continuous operation and manages more than $40 billion in assets, including equity positions in private and listed companies, in Australia and globally, CIMIC says.
Thiess, meanwhile, delivers open pit and underground mining in Australia, Asia, Africa and the Americas, providing services to 25 projects across a range of commodities. It has a diverse fleet of plant and equipment of more than 2,200 assets, a team of around 14,000 employees and generates annual revenues in excess of A$4.1 billion ($2.9 billion). Thiess is included in CIMIC’s Mining and Mineral Processing segment with CIMIC company Sedgman, a leading provider of minerals processing and associated infrastructure solutions to the global resources industry.
Following closing of the deal, CIMIC and Elliott will jointly control Thiess in accordance with a Shareholders’ Agreement, which contains governance arrangements as well as Thiess’ financial and dividend policies, among other items.
The price for Elliott’s 50% equity interest in Thiess implies an enterprise valuation of approximately A$4.3 billion (based on 100% of Thiess), subject to certain adjustments. The transaction will strengthen CIMIC’s balance sheet by generating cash proceeds on completion of A$1.7-A$1.9 billion as well as reducing CIMIC’s factoring balance by around A$700 million and CIMIC’s lease liability balance by some A$500 million, it said.
CIMIC Group Executive Chairman, Marcelino Fernández Verdes, said: “The sale agreement reflects Thiess’ ongoing strategic importance as a core activity for CIMIC. It capitalises on the robust outlook for the mining sector and, together with Elliott, we will pursue market opportunities in line with Thiess’ growth and diversification strategy.”
Back in July, CIMIC Group announced that it had signed an exclusivity agreement and was in advanced negotiations with funds advised by Elliott regarding the potential investment by Elliott into 50% of the share capital of Thiess.