Perenti Global Ltd, the owner of contract mining major Barminco and drill services company Ausdrill, has announced that it has successfully executed a share sale agreement in relation to a strategic investment by Sumitomo Corporation in idoba Pty Ltd, Perenti’s technology informed services business. The transaction further strengthens Sumitomo’s commitment to the idoba business, following the Memorandum of Understanding announced in February 2022.
idobais a name that was co-created using human and artificial intelligence input, which connected the Greek word eidos meaning ‘essence’ and the Japanese term ‘ba’, meaning knowledge mobilising space. It was formed by combining businesses that Perenti had acquired, namely Sandpit Innovation, ImpRes and Optika, then added to with Orelogy and Atomorphis. It will provide digital product and technology service offerings to mining and mining service clients with revenue and earnings generated from these services.
Under the Agreement, Sumitomo will acquire 10% of the issued shares in idoba for a total of A$5.4 million. This implies a current idoba equity value of A$54 million and enterprise value of A$80 million, Perenti says “reflecting the unique value proposition of the idoba ecosystem, and the significant embedded growth potential within both its consulting services and suite of Software as a Service (SaaS) products.“
The completion of the transaction is not subject to any unsatisfied conditions precedent and is expected within 10 business days. The proceeds of sale will be recycled across the business and in–line with the principles of Perenti’s Capital Management Policy.
The investment by Sumitomo is expected to bring substantial benefits to the idoba business, primarily through the ability to harness Sumitomo’s expertise and extensive global network. Sumitomo brings a unique set of opportunities to idoba, comprising over 893 group companies across 66 countries and multiple industries to which idoba’s products and services have relevance.
A key focus of the shareholder agreements between the parties is a commitment from Sumitomo to provide idoba access to this network and opportunity set. This is expected to help idoba substantially accelerate its business plan, strengthen access to technology partners and gain access to a broader global customer base. To facilitate unlocking these substantial commercial synergies, there will be a dedicated Sumitomo full–time secondee embedded within idoba.
Mark Norwell, Managing Director and Chief Executive Officer of Perenti, said that the strategic investment in idoba by a world class counterparty is recognition of the embedded value of idoba within Perenti, and the substantial growth opportunity that the business represents. “idoba was launched in July last year and since then we have invested in the expansion of its capabilities and services, including the implementation of appropriate corporate governance structures to support its continued growth. This investment by Sumitomo is recognition that in just a short time we have already built a great business capable of delivering very high–quality outputs, underpinned by great people and robust structures that will support the rapid increase in scale. I am confident that together with Sumitomo, idoba will continue to rethink and transform the mining industry to deliver long–term value creation for our respective shareholders, but now at an accelerated rate.“
Sarah Coleman, President of idoba said: “Since the execution of the MOU earlier this year, idoba and Sumitomo have worked collaboratively on several projects, affirming our shared aspiration and numerous complementary capabilities and strengths. The execution of this agreement will enable a greater level of co–creation and commitment to accelerate the joint development and market reach of our technology informed services for the resources sector and adjacent industries. This evolution of idoba’s relationship with Sumitomo is a strong endorsement of the value of idoba’s product and service portfolio. Sumitomo has a global opportunity set when it looks for paths to expand its digital innovation group, and this investment is a recognition of the unique capabilities that we have developed.”
