Tag Archives: M&A

Elliott funds take 50% stake in CIMIC’s Thiess

Equipment maintenance, Mining equipment, Mining mergers and acquisitions, Mining services, , , , ,

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

Explosives and blasting, Mining mergers and acquisitions, Mining services, , , ,

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

Bulk handling, Comminution of minerals, Equipment maintenance, Mineral processing, Mining consumables, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , , , , , ,

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

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

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

Communications in mining, Mining mergers and acquisitions, Mining safety, Mining services, , , , , , , , ,

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

Mineral project development, Mining mergers and acquisitions, Precious metals, , , , , , , , , ,

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

Mineral exploration, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , ,

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.”

NRW Holdings signs A$10 million deal to buy RCR’s Mining and Heat Treatment businesses

Bulk handling, Equipment maintenance, Mineral processing, Mining equipment, Mining mergers and acquisitions, Mining services, Mining techniques, , , , , , , , , , , , ,

NRW Holdings has entered into an agreement to acquire RCR Tomlinson’s Mining and Heat Treatment businesses for A$10 million ($7.3 million) in cash.

The agreement was signed with RCR’s administrators, which have been offloading various RCR subsidiaries since shortly after the company declared total liabilities of A$581.3 million alongside cash and equivalents of A$89.9 million in its 2018 financial year.

The purchase consideration will be funded from NRW’s existing cash reserves, with the deal expected to complete within the next two weeks, NRW said.

RCR Mining and Heat Treatment form part of the original RCR Tomlinson business established over 100 years ago.

RCR Mining includes the Mining Technologies business, which owns significant intellectual property across a range of products and processes and is recognised as a market leader by global resources clients, according to NRW.

“The Mining Technologies business is a leading national and international original equipment manufacturer and innovative materials handling designer with an extensive product range including apron and belt feeders, high capacity conveyors, slide gates, stackers, spreaders, fully track-mounted in-pit mining units (an example pictured above), sizers, scrubbers and screening plants,” NRW said.

One of RCR’s recent mining technology innovations is a 5 km relocatable conveyor, which includes a semi-mobile primary crushing station and feeds directly into Fortescue Metals’ Cloudbreak iron ore processing facility in the Pilbara of Western Australia.

Both the Mining Technologies and Heat treatment businesses have a high proportion of activity in equipment product support and maintenance (both on site and off site), NRW said, adding that the Heat Treatment business has facilities that include the largest stress relieving furnace in Australia.

Mining Technologies and Heat Treatment generated around A$110 million of revenue in the 2018 financial year and have a track record of delivering positive earnings, NRW noted, explaining the acquisition would be earnings per share accretive on a full-year basis, excluding integration and other one-off costs.

Jules Pemberton, NRW’s Managing Director and Chief Executive Officer, said the acquisition would allow NRW to provide incremental services, in line with its strategic objectives, to several core clients common to both NRW and the RCR businesses.

“In addition, the annuity style income from the maintenance activities of Mining Technologies and Heat Treatment will provide a platform to continue to build a broader service offering across an expanded resources and oil and gas client base.”

Fenner Dunlop’s BBCS ups its pulley game with CPA acquisition

Bulk handling, Equipment maintenance, Mining equipment, Mining mergers and acquisitions, Mining services, , , , , , , ,

Belle Banne Conveyor Services (BBCS) says it has acquired the business of Conveyor Pulleys Australia (CPA) from Longship Enterprises as it looks to bolster the range of pulleys manufactured at its Victoria, Australia, facilities.

BBCS, part of the Fenner Dunlop Australia group of companies, is a leading supplier of conveyor products, belt handling technology, materials handling engineering and maintenance services in the mining, bulk materials handling, ports, and heavy industry market sectors.

CPA, meanwhile, is a leading designer and manufacturer of conveyor pulleys, fabricated steelwork and a range of structural and specialised project work for bulk materials handling belt conveyor systems and other industrial markets worldwide.

Stuart Milliken, Fenner Dunlop’s Chief Financial Officer, said: “The combination of our BBCS brand with the CPA products and services will allow us to offer a complete range of high-quality pulleys, manufactured locally in Victoria.

“We will combine the knowledge and expertise of the two businesses to enable CPA to provide the highest level of service and support to its many valued customers”.
The deal became effective on January 7, according to BBCS

More major gold M&A as Newmont agrees to buy Goldcorp for $10 billion

Mining mergers and acquisitions, Precious metals, , , , , ,

Newmont Mining has agreed to acquire Goldcorp in a friendly all-stock deal valuing the Canada-headquartered company at $10 billion.

Under the terms of the agreement, Newmont will acquire each Goldcorp share for 0.3280 of a Newmont share, which represents a 17% premium based on the companies’ 20-day volume weighted average share prices.

The deal comes just weeks after Barrick Gold merged with Randgold Resources to create a new industry giant.

“The agreement will combine two gold industry leaders into Newmont Goldcorp, to create an unmatched portfolio of operations, projects, exploration opportunities, reserves and people in the gold mining sector,” Newmont said.

“Newmont Goldcorp’s world-class portfolio will feature operating assets in favourable jurisdictions, an unparalleled project pipeline, and exploration potential in the most prospective gold districts around the globe. In addition to providing shareholders the largest gold Reserves per share, Newmont Goldcorp will offer the highest annual dividend among senior gold producers.”

Gary Goldberg, Newmont’s Chief Executive Officer, said: “We have a proven strategy and disciplined implementation plan to realise the full value of the combination, including an exceptional pool of talented mining professionals, stable and profitable gold production of 6-7 Moz over a decades-long time horizon, the sector’s largest gold reserve and resource base, and a leading project and exploration pipeline.

“Our cultures are well aligned, with strong commitments to zero harm, inclusion and diversity, and industry-leading environmental, social and governance performance. We expect to generate up to $100 million in annual pre-tax synergies, with additional cost and efficiency opportunities that will be pursued through our proven full potential continuous improvement programme.”

Newmont Goldcorp’s reserves and resources will represent the largest in the gold sector, located in favourable mining jurisdictions in the Americas, Australia and Ghana, representing approximately 75%, 15% and 10%, respectively.

Newmont Goldcorp will also prioritise project development by returns and risk, while targeting $1.0 to 1.5 billion in divestitures over the next two years to optimise gold production at a sustainable, steady-state level of 6-7 Moz annually.

Goldcorp’s President and Chief Executive Officer, David Garofalo, said: “Newmont Goldcorp will be one of Canada’s largest gold producers and will have its North America regional office in Vancouver, and expects to oversee more than three million ounces of the combined company’s total annual gold production.”

Following the merger, Newmont Goldcorp’s management team will be appointed on a “best talent” basis, Newmont said, with Gary Goldberg as Chief Executive Officer and Tom Palmer as President and Chief Operating Officer.

As part of a planned and orderly leadership succession process, Goldberg and Newmont’s board have been engaged in discussions anticipating a CEO succession in early 2019. In October 2018, the company also announced Palmer’s promotion to President and Chief Operating Officer.

To ensure a smooth and successful combination, Goldberg has agreed to lead Newmont Goldcorp through closure of the transaction and integration of the two companies. The company expects this process to be substantially completed in the December quarter of 2019, when Goldberg plans to retire and Palmer will become President and Chief Executive Officer.

The Board of Directors will be proportionally comprised of Newmont and Goldcorp Directors, with Noreen Doyle as Chair and Ian Telfer as Deputy Chair.

Goldcorp’s Vancouver, Canada, office will become Newmont Goldcorp’s North America regional office, while Newmont Goldcorp’s South America regional office will be in Miami, US, the Australia regional office will be in Perth, and the Africa regional office will be in Accra, Ghana. Newmont Goldcorp will be a Delaware corporation with its corporate headquarters in Colorado, US.

The Boards of Directors of both companies have unanimously approved the transaction, including in the case of Goldcorp, on the unanimous recommendation of a special committee of independent directors of Goldcorp.

The transaction is expected to close in the June quarter, but closing is subject to approval by the shareholders of both companies; regulatory approvals in a number of jurisdictions including the European Union, Canada, South Korea and Mexico; and other customary closing conditions.