Tag Archives: M&A

Agnico Eagle and Kirkland Lake Gold merger to create ‘Canadian mining champion’

Agnico Eagle Mines and Kirkland Lake Gold have entered into an agreement to combine in a merger of equals, with the combined company to continue under the name Agnico Eagle Mines Limited.

The merger will establish the new Agnico Eagle as the gold industry’s highest-quality senior producer, with the lowest unit costs, highest margins, most favourable risk profile and industry-leading best practices in key areas of environmental, social and governance (ESG), the companies said.

Upon closing of the merger, the company is expected to have $2.3 billion of available liquidity, a mineral reserve base of 48 Moz of gold, (969 Mt at 1.53 g/t Au) – which has doubled over the last 10 years, and an extensive pipeline of development and exploration projects to drive sustainable, low-risk growth, they added. Expected production of the two companies for 2021 is approximately 3.4 Moz.

“The merger will create a best-in-class gold mining company operating in one of the world’s leading gold regions, the Abitibi-Greenstone Belt of north-eastern Ontario and north-western Quebec, with superior financial and operating metrics,” Agnico and Kirkland Lake said. “Consolidation within the Abitibi will also provide the new Agnico Eagle with significant value creation opportunities through synergies and other business improvement initiatives. Additionally, the company is established uniquely as the only gold producer in Nunavut and well positioned internationally with profitable and prospective assets in Australia, Finland and Mexico.”

The combined entity is also set to be a leader in energy performance and GHG emissions intensity, with a commitment to be Net Zero by 2050 or earlier, they said.

Under the merger agreement, which the Board of Directors of both companies have unanimously approved, the new Agnico Eagle will be led by a combined board and management team including Sean Boyd (Executive Chair), Tony Makuch (CEO), Ammar Al-Joundi (President), Jeffrey Parr (Vice-Chair of the Board) and Jamie Sokalsky (Lead Director).

The transaction is expected to close in December 2021 or in the March quarter of 2022.

Pursuant to the agreement, Kirkland Lake Gold shareholders will receive 0.7935 of an Agnico Eagle common share for each Kirkland Lake Gold common share held, implying a combined market capitalisation of approximately $24 billion. Upon closing, existing Agnico Eagle and Kirkland Lake Gold shareholders will own approximately 54% and 46% of the combined company, respectively.

Sean Boyd, Agnico Eagle’s Chief Executive Officer, said: “This merger starts a new chapter in Agnico Eagle’s 64-year history and creates the leading low risk global gold company with growing production, low costs and strong ESG leadership. The transaction creates a company with a strong platform of people, assets and financial resources to continue to build and operate a long-term sustainable and self-funding business.

“Kirkland Lake is an excellent cultural fit with Agnico Eagle, and we look forward to working together to further grow our business through exploration, mine development and optimisation of our high-quality asset base. Over time, we believe that the gold industry will continue to evolve and consolidate and with this transaction we are well positioned take advantage of high-quality opportunities and be a true Canadian mining champion.”

Tony Makuch, President and CEO of Kirkland Lake Gold, added: “We are very pleased and excited to be entering into a combination with Agnico Eagle. It is a unique ‘strength-on-strength’ transaction that combines the two global gold producers with the best track records for increasing per share value. The deal creates an industry leader with a dominant position in the Canadian market that is deserving of a premium valuation and is poised to generate superior long-term shareholder value going forward. The transaction represents a true merger of equals, with the business of both companies to benefit from the significant financial strength of the merged company, the extensive pipeline of development and exploration projects to drive future growth, and the potential to realize significant operational and strategic synergies along the Abitibi-Kirkland Lake corridor. It is the right deal for our company and its shareholders, our people, the communities where we operate, and all of our key stakeholder groups.”

Private equity firms look to take over Aggreko

The boards of directors of Aggreko plc and Albion Acquisitions Ltd have reached agreement on the terms and conditions of a recommended all-cash acquisition from I Squared Capital and TDR Capital for the mobile power provider.

The £8.80/share offer values Aggreko at £2.32 billion ($3.2 billion).

Earlier this week, Aggreko announced an underlying profit before tax of £102 million for 2020, slightly ahead of its initial guidance of £80-100 million, and group revenue of £693 million for 2020, down from £823 million in 2019. The company stated that 7% of this revenue came from the mining sector.

Aggreko said its directors intended to recommend unanimously that Aggreko shareholders vote in favour of the proposed scheme at a court meeting and general meeting. The acquisition is expected to become effective in summer of 2021 (in the Northern Hemisphere).

Ken Hanna, the Chairman of Aggreko, said: “The Aggreko Board believes that the offer from I Squared Capital and TDR Capital represents an attractive price in cash that fairly recognises Aggreko’s future prospects. We believe that the business, its people and customers will continue to be well supported with I Squared Capital and TDR Capital as shareholders bringing their expertise in energy and rental markets to support our existing strategy.”

Adil Rahmathulla of I Squared Capital added: “Aggreko is a global market leader in delivering bespoke temporary power solutions to its customers and has clearly shown it has a strategy to complete its journey towards a net-zero emission business. The urgency to deliver on that transition has only increased in the post-COVID environment.

“Repositioning Aggreko fast enough to truly capitalise on these trends and rapidly shifting customer demand requires significant investment in clean technology and a step change in the pace of transformation. We are well positioned to accelerate Aggreko’s development at this critical juncture and secure a successful future for the company, underpinned by a long-term investment focus and the combined expertise of TDR Capital and I Squared Capital in the power infrastructure and equipment rental sectors.”

Elliott funds take 50% stake in CIMIC’s Thiess

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.

Orica moves a step closer to Exsa explosives takeover

Orica says it has completed the acquisition of 83.5% of shares in Peru’s Exsa, moving the Australia-listed firm closer to becoming the number one industrial explosives player in the country, Alberto Calderon says.

First announced in February, the acquisition will create a step-change in Orica’s manufacturing footprint, driving competitive advantage and an enhanced position in the Latin America market, with significant synergies available by combining Orica and Exsa’s operations, the company says.

Calderon, Orica’s Managing Director and CEO, said the company was delighted to welcome Exsa into the Orica family.

“This is a transformational acquisition for our company. It establishes Orica as the number one player in Peru, Latin America’s highest growth market, and transforms our entire initiating system footprint.

“We now look forward bringing our two great businesses together and delivering the many meaningful and tangible synergies that will drive revenue and productivity across the region.”

Orica expects to complete the tender offer process for the remaining shares by the end of the calendar year.

Peru’s number one manufacturer and distributor of industrial explosives, Exsa provides technical assistance and support to the mining (particularly gold and copper) industries. It has a significant share in both Peru underground and open-pit markets, according to Orica, with an efficient supply chain, comprehensive sales distribution network and strategically located ammonium nitrate emulsion assets in north, central and south Peru.

Its initiation systems and packaged explosives capability is market-leading with a new, semi-automated and integrated initiation systems manufacturing facility in Lurin, Peru, according to the company.

Mineral Resources adds crushing wear parts expertise with acquisition of MWP

Mineral Resources Ltd says it has completed the acquisition of Mining Wear Parts (MWP), a privately-owned company that provides specialist parts to the mining, quarrying and recycling industries across Australia.

MWP, based in Brisbane and with operations in Western Australia, was established by David Macfarlane in 2016. Since then it has grown to become a leading and profitable national supplier of replacement parts used in crushing, milling, slurry pumps, mobile equipment and various consumable products such as castings, according to Mineral Resources.

As part of the transaction, Macfarlane will continue to lead MWP, which will become a wholly-owned subsidiary of Mineral Resources’ CSI Mining Services business (CSI). It is the company’s intention to retain the Mining Wear Parts trading name.

“Under its new ownership structure, MWP will have access to CSI’s financial, strategic and operational capabilities to execute the next step-up in its national growth plans,” Mineral Resources said. “In addition to accelerating MWP’s growth, MRL will incorporate the MWP business into the company’s Kwinana workshop as a first step towards establishing a fitting and services arm for the parts supplied by MWP.”

Mineral Resources Chief Operating Officer, Mike Grey, said: “As a leading provider in the mining services sector, with a significant footprint in crushing, in particular, the acquisition of Mining Wear Parts is a logical addition to the Mineral Resources Group of Companies and will allow us to further vertically integrate our supply chain.

“Mineral Resources, through CSI Mining Services, will be a significant client of Mining Wear Parts but we also look forward to introducing and expanding Mining Wear Parts and its quality service offering to our client base to deliver value-adding opportunities for all.”

Macfarlane, meanwhile, said: “With the support of Mineral Resources, Mining Wear Parts will be able to morph very quickly into a larger business with the ability to significantly increase our range of stocked parts and products and build a large technical and experienced base to better support and service our national client base.

“Importantly, Mineral Resources aligns with the culture we have established at Mining Wear Parts of being innovative and delivering value-adding solutions for our clients.

“Together, we will be able to grow Mining Wear Parts’ presence in the repairs and service markets by bringing the best service people, backed by premium wear and spare parts, the most advanced workshops such as Mineral Resources’ Kwinana facility and tooling for the best outcome for all of our clients.”

Primary Power acquisition to expand BESTECH mining and engineering reach

BESTECH says it is building its power services business and mining engineering capacity through the acquisition of Primary Power Group.

The deal, which will also allow the engineering firm to expand into the Greater Toronto Area (GTA), will see the company achieve:

  • Strategic growth objectives in key markets – BESTECH’s multi-disciplinary engineering team serves clients in the GTA and has global clients who will be well-served by this expansion;
  • Continued business from Primary Power Group’s extensive client portfolio, which includes many of BESTECH’s clients, and;
  • Greater opportunities to provide power and mining engineering services, and to recruit talent in southern Ontario.

Primary Power was founded in 1993 and has been a leader in medium and high-voltage power distribution services and panel manufacturing for more than 25 years, according to BESTECH. It has previously worked on projects with Xstrata Nickel (now Glencore) and Vale Inco (now Vale) in Ontario.

BESTECH, meanwhile, recently spun off its technology solutions division and launched a new company, SHYFTinc.

Primary Power Group will integrate into BESTECH’s Power Systems division, led by Dino Titon, Power Systems Engineering Manager.

Alex Kesik, retiring President and GM of Primary Power, said: “It is with great confidence that we take this opportunity for our team members to work with a larger group and to provide even greater service to our valued clients. We anticipate many unique opportunities for continued innovation and advancement. We are very impressed with BESTECH’s vision and commitment to partnership at every level.”

Patrick Fantin, BESTECH’s Engineering Services General Manager, said: “Primary Power Group has developed an outstanding business and has a reputation for service and quality. They are well-regarded by our major clients for local substation designs. As a team, we see this expansion as a partnership among professionals who care about the work we do, and the clients and communities we serve.

“We are excited about what our combined talents and capabilities will mean for our global clients. It enhances our capacity, our presence, and provides a direct and seamless expansion into the GTA.”

Sphera to increase risk reach with acquisition of thinkstep

Integrated risk management company, Sphera has entered into an agreement to acquire Stuttgart, Germany-based thinkstep in a deal that could see the creation of an “all-encompassing sustainability, health, safety, risk and product stewardship platform”.

In recent years, thinkstep, a software consulting services company specialising in corporate sustainability and product stewardship, successfully transformed its business model into a Software-as-a-Service-based solution. “Combined with thinkstep’s exceptional client base, this transition allowed it to take a major step forward in the company´s development,” Sphera said.

Sphera says 60 of the top 100 global metals and mining companies use its solutions for continuous improvement of core work processes, with today’s sector-wide operating principal of sustainable development making its offering even more important. One of its customers is Vale, which used Sphera’s environmental health and safety (EH&S) framework to integrate and prioritise risks from across its global operaitons.

Terms of the deal, which is pending customary German regulatory approvals for mergers and acquisitions, were not disclosed.

Sphera said: “thinkstep’s corporate sustainability software, implementation and consulting services simplify enterprise-wide sustainability reporting, risk management, audits, strategy and resource optimisation. The company’s product stewardship software and consulting services assist in designing more sustainable products and in managing product compliance across the lifecycle.”

Paul Marushka, Sphera’s President and CEO (pictured), said thinkstep’s cloud-based and on-premise software, data and expertise in the corporate sustainability and product stewardship markets advance the company’s mission of “creating a safer, more sustainable and productive world”, adding that thinkstep’s presence in Europe, the Middle East and Africa, and Asia Pacific, extended Sphera’s geographic footprint further.

Jan Poulsen, thinkstep CEO, said: “thinkstep offers our customers more than 30 years of experience in the field of sustainability. Adding our advanced software solutions, extensive LCA and eco-profile databases, and sustainability expertise to Sphera’s EH&S solutions is a very attractive business combination that will allow us to serve our extensive customer base more broadly going forward.”

Barrick and Newmont agree on Nevada gold joint venture

Barrick Gold and Newmont Mining have signed an implementation agreement that should see the two companies’ Nevada mining operations, assets, reserves, and talent combine under a joint venture.

The joint venture will, according to the two companies, allow them to capture an estimated $500 million in average annual pre-tax synergies in the first five full years of the combination, which is projected to total $5 billion pre-tax net present value over a 20-year period.

“The joint venture is an historic accord between the two gold mining companies, which have operated independently in Nevada for decades, but have previously been unable to agree terms for cooperation,” they said.

Barrick Gold had previously made an offer to take over Newmont, which itself is in the middle of trying to complete the acquisition of fellow gold miner Goldcorp. The company has agreed to withdraw this offer, in addition to proposals for the Newmont annual general meeting that it submitted on February 22. These included, according to Newmont, an amendment to Newmont’s by-laws to lower the share ownership threshold necessary to requisition shareholder meetings to 15% from the current 25% and to repeal all by-law amendments implemented since October 24, 2018.

Barrick President and Chief Executive Officer, Mark Bristow, said the Nevada agreement marked the successful culmination of a deal that had been more than 20 years in the making. “We listened to our shareholders and agreed with them that this was the best way to realise the enormous potential of the Nevada goldfields’ unequalled mineral endowment, and to maximise the returns from our operations there.

“We are finally taking down the fences to operate Nevada as a single entity in order to deliver full value to both sets of shareholders, as well as to all our stakeholders in the state, by securing the long-term future of gold mining in Nevada.”

Gary Goldberg, Chief Executive Officer of Newmont, said the logic of combining the two companies’ operations was compelling. “This agreement represents an innovative and effective way to generate long-term value from our joint assets in Nevada, and represents an important step forward in expanding value creation for our shareholders. Through the joint venture, we will also continue to pursue the highest standards in safety, along with responsible and meaningful engagement with our employees, communities, and other stakeholders,” he said.

Following the completion of the joint venture, the Nevada complex will be the world’s single-largest gold producer, with a pro-forma output of more than 4 Moz in 2018, three Tier One assets, potentially another one in the making, and 48 Moz of reserves.

The establishment of the joint venture is subject to the usual conditions, including regulatory approvals, and is expected to be completed in the coming months.

The joint venture will exclude Barrick’s Fourmile project and Newmont’s Fiberline and Mike deposits, pending the determination of their commercial feasibility.

Ausdrill transformation starts to take shape following Barminco buy

Less than four months after acquiring Barminco, Ausdrill says the integration of the two businesses is on target to deliver synergies of around A$11 million/y ($7.8 million/y) from its 2020 financial year.

This exceeds the previously stated target of A$5 million and is representative of both the new business structure Ausdrill has implemented and its growth strategy, the company said.

For the six months to end-December, Ausdrill said revenues were up 45.6% year-on-year to A$640.2 million, while underlying earnings before interest and taxes rose 27.6% to A$67.1 million. These results included two months contribution from the Barminco acquisition, which also included an additional 50% share in the two companies’ AUMS joint venture.

Ausdrill Managing Director, Mark Norwell, said the half-year results demonstrated the strength and diversity of the expanded Ausdrill group. “Importantly, the expanded Ausdrill group also secured over A$2 billion in new work since July 1, 2018, and successfully integrated the Barminco business, ensuring the company is set to deliver on its FY2019 guidance and is well positioned for FY2020.”

“Looking forward, we now have a more diverse and less capital-intensive group and have achieved this whilst maintaining a strong balance sheet that supports dividends and provides the flexibility to deliver on the strategy that has now been established.”

Ausdrill said the acquisition of Barminco made the company Australia’s second-largest mining services company.

Recently appointed Managing Director, Mark Norwell, said: “Ausdrill has done a great job in growing into a multi-national mining services company, but with the acquisition of Barminco and a refreshed structure, we have the opportunity to ensure the new Ausdrill has the best standards, a leading safety culture, and a constant focus on efficiencies to deliver for our customers, shareholders, communities and our 7,500 committed employees.

“In particular, a key focus is to transform our above ground operations in Africa, divest businesses that do not fit strategically, and ensure we are achieving best practice in the way we win and deliver work for clients across the group.

“We are also looking at ways to grow the business, such as expansion into new markets where we can have a competitive edge and into adjacent services that complement our existing portfolio.

“We expect to see continued strength in our core markets, particularly underground, and the Company remains on track to deliver its FY19 guidance of $98 million underlying net profit after tax.”