Tag Archives: M&A

Thiess to gain underground metals mining exposure with A$65 million PYBAR purchase

Mining mergers and acquisitions, Mining services, , , , ,

Thiess Pty Ltd, part of the Thiess Group, has signed an agreement with Metarock Group Ltd to acquire Australia-based underground metals business PYBAR Holdings Limited and its 100% subsidiary Pybar Mining Services Pty Ltd.

PYBAR will join the Thiess Group once the customary sale conditions are satisfied and the completion process is finalised.

The total headline consideration for PYBAR is A$65 million ($42.7 million), with all PYBAR employees to transfer with the business, including the senior management team led by James Glover, PYBAR CEO.

Thiess Group Executive Chair and CEO, Michael Wright, said: “This acquisition is an ongoing part of Thiess’ strategy to diversify our commodities and the services we offer our clients. We are committed to developing a global mining portfolio, with a strong focus on the metals and minerals critical to the global energy transition.

“The PYBAR acquisition is key to this. PYBAR’s specialist skills will expand the Thiess Group’s service offering to our clients, and open up a pipeline of opportunities in underground metals and minerals across Australia and globally.”

Mastermyne (as Metarock was previously known) agreeed to buy PYBAR Mining Services in a cash and share deal that came with an equity purchase price of around A$47 million back in 2021. The acquisition saw Mastermyne, a metallurgical coal-focused contractor at the time, gain exposure to PYBAR’s gold, copper, zinc and lead-related revenues.

Wright added: “PYBAR’s 30 years of expertise and proven experience in underground mining is well known and respected, and we appreciate the commitment of their dedicated workforce. We will retain the PYBAR brand and will work with the leadership team to support their current clients, and grow PYBAR’s strong brand within and beyond their current markets.”

The Thiess Group operating companies’ industry experience, complementary portfolio of services and geographical reach, places the group in a strong position to enhance PYBAR’s value proposition to both their clients and their people, Thiess says.

Metarock says the cash proceeds from the sale will materially strengthen the balance sheet of Metarock and provide a platform for the company to capitalise on the significant growth pipeline across its remaining business units, Mastermyne, Wilson Mining and MyneSight.

Newmont completes acquisition of Newcrest in major gold consolidation move

Mining mergers and acquisitions, Precious metals, , ,

Newmont Corporation has announced the completion of the acquisition of Newcrest Mining Limited to create what it says is the world’s leading gold company with robust copper production.

Featuring more than half of the world’s Tier 1 assets, according to the company, Newmont’s unmatched portfolio of long-life operations, value-accretive projects, abundant exploration opportunities, and world-class talent will underpin years of profitable production in the world’s most favorable jurisdictions, it says. This expanded portfolio will include operations with scale, margin and mine life to generate robust and lasting returns for decades, while supporting best-in-class sustainability performance.

“Today marks a historic milestone in our company and the industry with the successful completion of this transformational acquisition of Newcrest by Newmont,” Tom Palmer, Newmont’s President and Chief Executive Officer, said. “Our attention now turns to safely, efficiently, and responsibly integrating Newcrest’s assets and people into Newmont’s proven operating model, so we can accelerate the delivery of our value-focused strategy for all our stakeholders.”

With the transaction now complete, Newmont’s acquisition of Newcrest is expected to:

  • Strengthen Newmont’s position as the responsible gold mining leader through the combination of high-quality operations, projects and reserves concentrated in low-risk jurisdictions, including 10 Tier 1 operations to support decades of safe, profitable and responsible gold and copper production;
  • Generate annual pre-tax synergies of $500 million, expected to be achieved within the first 24 months, together with at least $2 billion in cash improvements through portfolio optimisation in the first two years after closing;
  • Maintain Newmont’s capital allocation priorities and non-binding dividend payout (since closing the Goldcorp transaction in 2019, Newmont has paid more than $5 billion in dividends, further demonstrating its commitment to our shareholders, it says);
  • Feature a deep bench of experienced leaders, subject matter experts and existing regional teams in Australia and Canada with extensive mining industry experience; and
  • Maintain industry leadership in environmental, social and governance performance.

Mark Norwell on the Perenti mining services differentiator

Automation, Environmental, Mine operation news, Mineral project development, Mining events, Mining mergers and acquisitions, Mining safety, Mining services, Power supply for mines, Precious metals, Sustainable mining, , , , , , , , , , , , , , , , , ,

Perenti continues to make inroads across the mining value chain, reflected of late with the recent acquisition of DDH1, record 2023 financial year results and deployment of some of its initial artificial intelligence-backed solutions from the idoba technology business.

Against this busy backdrop and a keynote address at IMARC in Sydney, IM caught up with Mark Norwell, Managing Director & CEO of Perenti, to talk technology in the mining services space.

IM: The contract mining and mining services business is a very competitive space (especially in Australia). How are you readily leveraging technology for your mining clients as a competitive advantage?

MN: The industry has always been competitive, and that global competition continues to evolve.

I would say Barminco has been at the top of the game for three decades. Having that technical competence, the process, the scale and the people drives competitive advantage in its own right. As we have seen some shift in technology and new technology initiatives, the adoption has added to productivity and, therefore, our competitive advantage has grown again.

In terms of how we are adopting technology, there are a couple of areas to mention.

To come back to Barminco, one aspect has been through deploying point solutions for productivity improvement. This has been ongoing and part of our DNA.

More broadly, when we launched the idoba technology division a few years ago, we took the view that as we see greater shifts and acceleration of technology opportunities in mining, we needed the internal capability to drive that change from the inside out; not from the outside in.

We have the deep domain expertise in mining that, when combined with our technology business, further improves our existing contracting services, as well as creates new potential lines of business.

The differentiator for idoba is the ability to develop products and trial them within our own captive ‘sandpit’. A lot of technology companies don’t have this option. They develop solutions and go to mining companies with a great idea that lacks the evidence of trial data needed for many mining companies to implement the solutions. As a result, the trials never get off the ground. We don’t have that problem given we have operations – and supporting clients with matching values – to allow us to trial products in the field. This has been witnessed of late where we are rolling out some products to test across our underground mines in Australia (idoba recently announced that its Mine Performance Navigator AI-powered decision-support and analysis tool had been rolled out to a dozen underground Barminco-operated mine sites).

IM: In terms of automation, digitalisation/digitisation and electrification, where are you looking to take the lead for your mining clients?

MN: They are all interconnected to some extent. Digitisation, for example, really drives the value from deploying automation and electrification. That digital platform is imperative for mines of the future and is where idoba comes into play.

We want to be at the forefront with digitisation and the digital platform; likewise with electrification.

With our Barminco business, we are one of the world leaders in hard-rock underground mining, and electrification just makes sense for underground hard-rock mines – there are so many benefits. What’s also important is the collaboration associated with that. We heard this week from Perenti, ABB and IGO on the IMARC panel discussion that no-one has all of the capabilities to effectively electrify a mine, so choosing partners is crucial to execution.

Under an agreement between mine owner AngloGold Ashanti, Barminco and Sandvik, the Sunrise Dam gold operation in Western Australia began trialing the prototype 65 t Sandvik TH665B on September 14

When it comes to automation, it is an area we are working through. We have established teleremote and remote operating centres in the recent past – operating multiple machines at remote mine sites from Perth, for example – but, at this stage, we are not accelerating these developments at the same pace as electrification and digitisation due to timing really being of the essence for these two.

Saying that, our work with Sandvik and Newtrax on Level 9 collision intervention is related to this, being a building block of automation more broadly as well as a major game changer from the safety perspective. Once we nail that with a digital platform, we will continue to advance automation more broadly. We are closing in on that with Level 9 collision intervention trials expected to take place in the near term.

When we look at idoba and the work we are doing on DiiMOS (Distributed, Intelligent, Integrated Mining Operating System), we are agnostic to the equipment, the mine planning software and the broader mining processes at play. If we are not agnostic, we could end up locking our clients into one route that potentially ends up destroying value. We are also building out a capability where some clients can pick and choose, or take the full suite, from idoba.

The focus is on providing solutions bespoke to the mine’s needs.

IM: How are you balancing your close relationships with the technology vendors and your own internal technology developments through idoba? Who are the most obvious first customers for the idoba platform?

MN: There is always going to be some overlap and crossover, but we come at this with an operator mindset, where technology can augment this. The OEMs come at it from an equipment mindset with associated technologies to bolt on. The combination and partnership of these two approaches makes sense as you have the equipment, technology and operations covered.

There will be areas where we still have some competition but, ultimately, it is limited.

The full value is going to be generated through how we partner and collaborate with all the companies within the value chain. We have a long history of collaborating with Sandvik, for instance, as well as recent history with ABB, and everyone brings something different to the table. Without that combination of capabilities, we are not going to see the industry shift at the rate it needs to.

Our starting point for idoba will be servicing our current customers as we develop new products and support them on their journey. We will see some clients want more of our solutions than others. As we service our current clients with these, we can take what we have learnt to service new clients. The new clients might be mine operators themselves, where we provide digital solutions as a software-as-a-service. This opens up new potential markets to us, which goes to the broader strategy we set in 2019. This recognises the deep domain expertise we have in mining – which has served us extremely well and is not something everyone has. The plan back then was to leverage this and build out the services beyond that current offering; technology being one of those.

As we develop this new technology, we have learnt that we have the ability to offer lower capital intensity solutions that can serve us well throughout the mining cycles.

IM: Looking at decarbonisation and, more specifically, the agreement you have in place with ABB to ‘reduce the risk and uncertainty of electrifying both green and brownfield operations’; could you talk me through what risk mitigation processes you will be using as part of this? How do you tackle the uncertainty associated with making investments in infrastructure, people and technology against a very ‘fluid’ technology backdrop?

MN: There are a couple of areas that need to be front and centre through that journey. The digital integration platform is one of those – the complexity of what we’re solving for these days is far greater than what we were used to. Whether you are putting in a point solution, or a whole mine to electrify, having a digital platform is critical to making the right decisions at the right time.

As the technology evolves, this digital platform is even more integral to reinforcing decision making. If you go straight to the hardware without the digital backbone and the distributed network of energy needed to electrify, you are setup to fail in the long term.

idoba recently announced that its Mine Performance Navigator AI-powered decision-support and analysis tool had been rolled out to a dozen underground Barminco-operated mine sites

The other aspect that needs consideration from a risk mitigation perspective is having the leadership and culture in place to see these projects through. Leaders have to be ready to unlearn and relearn throughout this process.

Not only that you need to try to engineer out risk wherever possible through critical trials, a strong operational methodology and an assessment of the causal factors of what can go wrong and where those points are within the design. This could be through a traditional engineering methodology or technology adoption.

IM: You set up the Denver office a few years ago now. Outside of Hemlo and Red Chris, what does the pipeline of opportunities look like in North America? Does this client base require a different type of offering to what you traditionally have in Australia?

MN: We’re currently about A$100 million ($64 million) of revenue between those two agreements. We are looking for that to grow to A$400-500 million over the next three to four years. We see the pipeline in Canada and the US as significant. We have also installed the former head of AUMS in this business, looking to replicate the success we had in Africa over eight years in North America.

It’s fair to say the contractor model for Barminco is well understood in Australia and Africa; more so than in North America. In North America, they have a contract model that tends to be based on a charge-by-the-hour type of agreements, whereas we are looking to bring a technical approach to all our contracting.

At the same time as looking to grow this business, we are conscious of growing too quickly. Bringing in a new mining methodology takes a lot of change management. We don’t want to go too quick and have a misstep.

IM: What about ongoing M&A? Are there still gaps in the portfolio you are looking to fill?

MN: In terms of our strategy, we have said we will continue to build our portfolio to leverage our core competency in mining and adjacent areas to add value. We ultimately want a complete portfolio of businesses that have adjacencies to our core businesses.

We are still open to further M&A as long as it leverages our core capabilities and makes sense to our investors.

Whitehaven Coal to acquire BMA’s Daunia and Blackwater mines

Automation, Coal technology, Mining mergers and acquisitions, Steel and iron ore, , , , , , , ,

Whitehaven Coal has executed definitive sale agreements with BHP Group and Mitsubishi Development Pty Ltd (together, BMA) to acquire 100% of both the Daunia and Blackwater coal mines in Queensland, Australia, for an aggregate consideration of $3.2 billion.

Whitehaven says the transaction delivers significant value upside with attractive growth opportunities in Queensland’s Bowen Basin, including synergies with Whitehaven’s Winchester South development project. It also transforms Whitehaven into a metallurgical coal producer in line with strategy, with pro-forma managed run of mine (ROM) production of around 40 Mt/y annum and pro-forma revenues of around 70% metallurgical coal and 30% thermal coal.

Completion of the acquisition is expected in the June 2024 quarter subject to satisfying conditions precedent including regulatory and merger control approvals.

The Daunia open-cut coal mine is 30 km south-east of Moranbah, and about 170 km southwest of Mackay in Queensland. The mine produces a hard coking coal (HCC) and pulverised coal injection (PCI) metallurgical coal products, and it is expected to produce an average of circa-4.9 Mt/y of saleable coal production over the next five years. It is expected that the remaining LOM production will continue until 2040. Daunia is adjacent to Whitehaven’s Winchester South development project in the Bowen Basin. Following the acquisition, Daunia’s coal products will continue to be exported to customers across Asia through the Dalrymple Bay Terminal near Mackay.

Back in 2020, BMA announced a A$100 million ($64 million) investment and new jobs as part of the introduction of 34 autonomous trucks at the mine.

The Blackwater coal mine is an open-cut mine which lies 73 km south-east of Emerald in Queensland and is expected to produce an average of circa-12.4 Mt/y of saleable coal production over the next five years. It is one of the largest coal mines in Australia, with a strike length of 80 km, and has the largest dragline fleet (7) in the Southern Hemisphere. Both HCC and semi soft coking coal (SSCC) metallurgical coal products are mined at Blackwater. The remaining LOM production is expected to be greater than 50 years. Blackwater’s coal products are exported to customers across Asia through the RG Tanna Terminal north of Gladstone.

Paul Flynn, CEO & Managing Director of Whitehaven, said: “This is a compelling transaction for Whitehaven that accelerates our strategy, transforms our company and delivers substantial value for our shareholders.

“This transformational acquisition will pivot our portfolio towards metallurgical coal, which has been a core pillar of our strategy for many years making this a better balanced business. Our thermal coal business remains strategically important as we continue to provide much-needed coal products to support the global energy transition and as customers seek our high-quality and high-CV products to limit their emissions.

“This is a highly attractive and materially earnings accretive acquisition, with considerable upside potential, which we expect will deliver meaningful returns to our shareholders for many years to come. It strengthens our portfolio of quality, long life assets in attractive locations providing geographic and operational diversification and scale benefits.

“We look forward to completing the transaction and welcoming the teams at Daunia and Blackwater into the Whitehaven business, and working with the local community and other stakeholders who will remain an important part of our operations.”

Newmont looks to expand gold production leadership with Newcrest bid

Mining mergers and acquisitions, Precious metals, , ,

Newmont has submitted a non-binding proposal to acquire 100% of Newcrest Mining by way of a scheme of arrangement in a proposed transaction that, it says, would combine two of the sector’s top senior gold producers, and set the standard for sustainable and responsible gold mining.

Newmont’s proposal to combine with Newcrest is on the basis of 0.380 Newmont shares per Newcrest share, which would result in the combined company being 30% owned by Newcrest and 70% owned by Newmont. This $16.9 billion offer is at a 21% premium to the share price of Newcrest prior to the announced bid.

It follows the prior receipt of an indicative, non-binding and conditional proposal from Newmont to acquire Newcrest at an exchange ratio of 0.363 Newmont shares for each Newcrest share, Newcrest said.

Newcrest produced 1.9 Moz of gold and 121,000 t of copper in its 2022 financial year, while Newmont’s 2022 full-year guidance was 6 Moz of attributable gold production.

Newmont, already the world’s biggest gold miner by production, said: “This represents a compelling opportunity for the shareholders of both companies to share in the upside of putting together two complementary businesses.”

Tom Palmer, President and CEO of Newmont, said: “We believe a combination of Newmont and Newcrest presents a powerful value proposition to our respective shareholders, workforce and the communities in which we operate. The proposed transaction would join industry-leading portfolios of assets and projects to create long-term value across the combined global business, and we welcome the consideration of Newcrest’s Board of Directors.”

Newmont’s proposal is subject to certain customary conditions, including due diligence to the satisfaction of both parties, entry into a scheme implementation agreement and a recommendation from the Newcrest Board of Directors that Newcrest shareholders vote in favour of the proposal.

Epiroc spots further agnostic automation opportunities

Automation, Communications in mining, Environmental, Mining equipment, Mining finance, Mining services, Mining software, Power supply for mines, Sustainable mining, , , , , , , , , ,

Having convinced iron ore miner Roy Hill to move ahead with plans to create the world’s largest autonomous mine, Epiroc and ASI – which the OEM owns 34% of – are ready to take on new equipment-agnostic automation opportunities, Helena Hedblom says.

Speaking after the company’s December quarter and 2022 results were released, Hedblom, President and CEO of Epiroc, said the company and ASI had progressed through three years of rigorous testing of the system, with the solution now entering the “scale” phase.

The Roy Hill project’s Production Verification phase was recently completed with 10 converted haul trucks fitted with vehicle automation kits and in cab clients using ASI Mining’s Mobius traffic management and on–board automation systems to navigate the mine’s virtual map, communicating with ancillary vehicles and the control room.

From March, the companies will start converting the mixed fleet of 96 conventional haul trucks to driverless operation, which is an increase from the 77 trucks originally set to be converted to running autonomously.

“There are certainly opportunities to deploy such solutions elsewhere,” Hedblom told IM. “If you look at how we started autonomous drilling with BHP, we took a step-by-step approach ahead of rolling that out to our customer base.

“We and ASI hope to be able to do that for this type of autonomous haulage solution too.”

Epiroc’s financial results highlighted another robust quarter where orders received increased 18% year-on-year to SEK13.7 billion ($1.3 billion), representing an organic decrease of 4% and organic growth of 3% when excluding Epiroc’s Russian business (which has now ceased). Revenues increased 25% to SEK13.9 billion, an organic increase of 8%, and operating profit increased 25% to SEK3.2 billion.

While this quarter saw fewer large orders than previous three-month periods, it did see the easing of supply challenges and good output levels, Epiroc said, adding that operating profit was at a record high.

The period also saw the company complete the acquisition of four companies – Remote Control Technologies (RCT), Wain-Roy, Radlink and Geoscan – continuing the acceleration of M&A activity Epiroc has become known for.

The purchase of RCT also offers another automation in-road, with the Australia-based company known as an OEM-agnostic automation specialist.

Listing off several of these acquisitions, Hedblom also highlighted the planned acquisition of CR, which has an offering covering surface and underground mining, and products including cast lips, teeth, and protective shrouds installed on mining buckets and loaders.

“CR and ground engaging tools represent a new niche for us,” she said.

When Epiroc announced the planned acquisition in December, it said the move was predicated on expanding its “first-rate offering” of essential consumables and digital solutions.

Hedblom, meanwhile, said the company would continue to evaluate further M&A opportunities as they appeared.

Outside of automation and digitalisation, Hedblom remained confident the company would hit its electrification goals in 2025 – goals that include offering a complete range of emission-free underground products.

“We actually had our first order for the underground tunnelling sector recently,” she said. “We are very well positioned to achieve these targets.”

Sika looks to acquire shotcrete major MBCC Group

Explosives and blasting, Mining consumables, Mining mergers and acquisitions, Mining services, Sustainable mining, , , , , , , ,

Sika has signed a definitive agreement to acquire MBCC Group, the former BASF Construction Chemicals, from an affiliate of Lone Star Funds, a global private equity firm, for a consideration of CHF5.5 billion ($6 billion).

MBCC Group is a leading supplier in construction chemicals worldwide. The acquisition will, Sika says, complement and broaden its product and solution offerings in four of five core technologies and seven of eight Sika Target Markets, in addition to further strengthening its geographic footprint.

Both MBCC Group and Sika have large shotcrete offerings for the mining sector.

“The combined business will be a key accelerator in enabling both Sika’s and MBCC Group’s customers and the construction industry to drive the sustainable transformation further and faster,” it added.

MBCC Group, headquartered in Mannheim, Germany, is active in the field of construction systems and admixture systems. It has operations in over 60 countries and more than 130 production facilities.

“With its broad and balanced product offering, MBCC Group participates in all phases of the construction life cycle and is a key contributor to the decarbonisation of the construction industry,” Sika said.

Thomas Hasler, CEO of Sika, said: “Two sustainability champions will join forces. Sika is first in class for sustainable solutions across the entire construction industry, and similarly, sustainability stands at the core of MBCC Group’s business. Together we will reinforce our complementary range of products and services across the entire construction life cycle. With our combined portfolio, we will enable and accelerate the future of sustainable construction for the benefit of customers, employees, shareholders, and coming generations.”

Jochen Fabritius, CEO of MBCC Group, added: “We have found a perfect partner who shares our core beliefs. Sika is well known for its entrepreneurial spirit and its profitable growth strategy, including a strong acquisition track record. Our products and competencies will again be at the core of the business. Together with Sika, we are looking forward to exploring new and exciting business opportunities.”

The transaction will see Sika expand its product and service offering in construction chemicals and industrial adhesives by adding the highly complementary portfolio of MBCC Group, and is set to reach sales in excess of CHF13 billion in 2023.

Customers will benefit from an enhanced and more efficient distribution network across all construction markets, it said, while sustainability stands at the core of both companies.

Today, 70% of Sika’s sales is generated by products that have a positive effect on sustainability, whereas more than 35% of MBCC Group products are sustainably advanced, according to the company.

“Through the combination, Sika is committed to generating 80% of its sales from products that positively impact sustainability.”

The acquisition is subject to regulatory approval. Sika is confident it will obtain all clearances and will actively engage with the authorities. The closing of the acquisition is targeted for the second half of 2022.

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

Mining industry recognition, Mining mergers and acquisitions, Precious metals, Sustainable mining, , , , , ,

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

Environmental, Mining mergers and acquisitions, Mining services, Power supply for mines, , , , , ,

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.”