Tag Archives: mining M&A

Danfoss to acquire Eaton’s Hydraulics business

Danfoss has entered into an agreement to acquire Eaton’s Hydraulics business, creating a “global leader in mobile and industrial hydraulics”, Kim Fausing, Danfoss’ President and CEO, says.

The company has agreed to pay $3.3 billion for the business, explaining that the acquisition is fully in line with Danfoss’ strategy to strengthen its core businesses and enhance customer value.

Fausing said the deal was a “once-in-a-lifetime opportunity” to combine the two companies’ largely complementary portfolios and geographic footprints.

“Eaton Hydraulics is a highly respected player in the global industry, recognised for its dedicated people and strong brands. By combining the knowledge and experience of the two businesses, our customers will benefit from unmatched expertise from a single partner,” he said.

“With this agreement, we continue to invest in our core hydraulics business and digital solutions to stay a strong technology partner.”

Craig Arnold, Eaton Chairman and CEO, said Eaton’s Hydraulics business will benefit greatly from being “part of a company that has hydraulics at its core”.

He added: “When complete, this deal will bring together two talented teams with deep hydraulics knowledge and expertise. And Eaton’s hydraulics team will be part of a company that is committed to becoming a global leader in mobile and industrial hydraulics. The combined business will also benefit customers and distributors by offering industry-leading technology and a much broader portfolio of hydraulic solutions.”

Danfoss says the two businesses are leaders in the industry and have many organisational similarities, including company culture and a focus on customers, R&D and quality. The combined business creates a broader presence across the world, while enabling Danfoss to enter the industrial hydraulics market served by Eaton Hydraulics, the company explained.

Eaton Hydraulics provides products for customers in markets such as agriculture, construction and industrial markets. It also supplies mining companies with harsh duty cycle component solutions and services.

The business will be transferred into the existing Danfoss business segment, Danfoss Power Solutions, adding around 11,000 employees and 2019 sales of $2.2 billion to the business segment, which will double the hydraulics business. Danfoss, today, has some 28,000 employees and 2019 sales of $7 billion. Accordingly, with this transaction, Danfoss will increase its size by one-third.

Eric Alström, President of Danfoss Power Solutions, said: “Hydraulics is our core, and we have for years strengthened our Power Solutions business through high customer focus, as well as through significant investments in technology leadership.

“I believe our customers will benefit from combining these two businesses into a full-line hydraulics player dedicated to innovation and with a broad offering of products, robust distribution channels and tremendous geographic reach.”

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year.

Envirosuite to acquire environmental monitoring solutions leader

Envirosuite Ltd (EVS) says it has signed a binding agreement to acquire EMS Bruel & Kjaer Holdings, a global provider of continuous, unattended environmental monitoring solutions.

EVS says it sees significant opportunity for short-term cross-sell and up-sell opportunities across the respective industry sectors of EVS and EMS, including mining, Smart Cities, airports, waste and wastewater, construction and heavy industry sectors, and geographies in which the two businesses are currently active.

EMS’ solutions for mining include software as a service for demonstrating environmental compliance, vibration & noise monitoring terminals, noise loggers, blast overpressure microphones, site monitoring cameras, air quality monitors and noise mapping software.

The cash and shares transaction will see EVS purchase EMS on a cash-free, debt free basis, from its shareholder group, comprising the majority shareholders Macquarie Corporate Holdings and Spectris Group Holdings, as well as the EMS founders whose nominees hold a minority shareholding.

The combined group will have a highly complementary geographic fit, as outside of Australia EVS has established offices in Canada, Chile, Colombia, Spain and China, while EMS has offices in USA, Denmark, Spain and Taiwan, EVS said.

The vision is to become the leading global environmental technology platform for real-time decision making across the three major environmental domains – air, noise, and water, EVS said.

“With this acquisition, the combined group will provide leading solutions across air quality (including odour and dust), noise and vibration monitoring, and waste and wastewater. This will significantly build out the current platform offering,” the company said.

“For some time, the board has harboured a longer-term internal aspiration to achieve A$100 million ($68 million) in annual revenues with a strong annuity base, and it is the board’s view that this transaction brings that aspiration into the medium term.”

GR Engineering to grow Americas footprint with Hanlon Engineering buy

GR Engineering Services has entered into an agreement to acquire Hanlon Engineering & Associates Inc as it looks to grow its existing footprint within the Americas.

Hanlon, based in Arizona, USA, is a multi-disciplinary engineering services firm that provides engineering, procurement and construction management services to the mining sector in North America. It was established in 1999 and employs around 40 people. Hanlon also has a satellite office in Elko, Nevada.

Among the list of mining companies Hanlon has carried out work for is Agnico Eagle Mines, Barrick Gold, BHP, Freeport McMoRan Hecla Mining and Newmont.

GR Engineering’s Managing Director, Geoff Jones, said the acquisition of Hanlon was aligned with GR Engineering’s growth strategy.

“We are pleased to be acquiring the Hanlon business,” Jones said. “Hanlon has a strong local brand with an excellent safety record and longstanding relationships with major mining clients. Hanlon has an experienced management team capable of taking advantage of the numerous growth opportunities that exist in the Americas.”

Based on Hanlon’s current workflow, identified growth prospects and GR Engineering’s existing pipeline of work in the Americas, GR Engineering anticipates the business will immediately contribute to GR Engineering’s revenue and become earnings per share accretive for the company in the financial year ending 30 June 2021.

The acquisition remains subject to the satisfaction of several conditions precedent customary for an agreement of this nature. It is anticipated that the acquisition will be completed by the end of February.

Mammoet completes ALE acquisition

Mammoet has completed the acquisition of ALE, just over four months since the two heavy logistics companies agreed on the deal.

The businesses will now operate as one company under the Mammoet brand and, over the coming months, a fully developed integration plan will be rolled out that will focus on bringing the two organisations together, while maintaining safe and world-class service levels to our customers, Mammoet says.

According to Mammoet, the global coverage of the combined business covers over 140 offices and branches worldwide. Both companies specialise in engineered heavy lifting and transport for sectors such as the petrochemical industry, renewable energy, power generation, civil construction and the offshore industry.

Paul van Gelder, Mammoet CEO, said: “We are looking forward to working together with our new colleagues all over the world and establishing long-term relationships with our customers, existing and new. We will put all our efforts into supporting them with their activities aimed at enhancing cities, businesses and communities that are all part of the transition to a more sustainable future. As their goals increase in size and complexity, we must reshape ourselves to support them while keeping our primary focus on safety.”

Mammoet’s combined team of professionals, as well as its fleet of heavy equipment, are now the world’s largest, according to the company. “This significantly enhances scalability, innovation capabilities and efficient mobilisation, like no one else in the industry.”

Mammoet says it is the only global heavy lifting and transport business with a large R&D facility run independently from its operational activities, allowing it to innovate for the long term in close collaboration with customers.

Anglo American eyes polyhalite potential with Sirius Minerals bid

Anglo American has gone public with a bid to buy Sirius Minerals and its North Yorkshire polyhalite project in the UK.

The all-cash bid, which values Sirius at £386 million ($507 million), comes shortly after Sirius announced a strategic review for the project that included a broader process to seek a major strategic partner for the asset.

Anglo says it identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product.

The North Yorkshire polyhalite project, which is spilit into two stages, will see product extracted via two mine shafts and transported to Teesside, in the northeast of England, on a conveyer belt system in an underground tunnel. It will then be granulated at a materials handling facility (MHF), with the majority being exported to overseas markets.

Infrastructure development on the project includes sinking the shafts at the Woodsmith mine to access the polyhalite deposit (using Herrenknecht’s Shaft Boring Roadheader); developing a 37 km-long underground mineral transport system using tunnel boring machines; constructing a MHF in Teesside for granulating or chipping the mined material into the final product; and harbour facilities comprising an approximately 3.5 km-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.

In its announcement this morning, Anglo said: “The project has the potential to fit well with Anglo American’s established strategy of focusing on world-class assets, particularly in the context of Anglo American’s portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.”

Anglo is not new to the fertiliser market having, until 2016, a phosphates business in Brazil. It sold the mine, beneficiation plant, two chemical complexes and two further mineral deposits that made up this business that year to China Molybdenum in a $1.5 billion deal that also included its niobium assets.

Sirius announced its strategic review back in September 2019 after it had to terminate a $2.5 billion revolving credit facility stage 2 financing for the project (to get it to 20 Mt/y capacity) due to a worsening of market conditions for a required bond raising.

This led to the company slowing development across the project in order to preserve funding to allow more time to “develop alternatives and preserve the significant amount of inherent value in this world-class project”, Chris Fraser, Managing Director and CEO, said at the time.

This saw the company lay out a pathway that would still see first polyhalite production in the June quarter of 2022, but could see the ramp-up to stage one 10 Mt/y polyhalite capacity reached in the September quarters of 2025 or 2026, depending on if there was a 12 or 24 month deferral of the planned development scope.

Anglo said, during the first two years after an offer is successfully completed, development work on the project is expected to be broadly in line with Sirius’ revised development plan “although Anglo American intends to update the development timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices”.

It added: “Anglo believes that the project has the potential to become a world-class, low-cost and long-life asset. Sirius has progressed the development of the project to an advanced stage, with construction now under way for over two years.

“Sirius has indicated that this is currently the world’s largest known high-grade polyhalite deposit with a JORC reserve of 290 Mt, with a grade of 88.8%, and a resource of 2,690 Mt. The resource indicated by Sirius has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process.”

In addition, Sirius has indicated the project could operate at an EBITDA margin potentially well in excess of 50%, according to Anglo, leaving the project well positioned for strong through-the-cycle profitability with a long anticipated asset life.

“At this stage, the project requires a significant amount of further financing to develop and commission the operation that has proven challenging for Sirius to procure on an economic basis,” the diversified miner said. “Anglo American, as one of the world’s leading mining companies, has the resources and capabilities to help build on the achievements of the Sirius team. Anglo American remains committed to its disciplined capital allocation framework.”

Anglo explained that there is potential long-term benefits in applying its technical expertise in both the development and operational phases, as well as utilising its recognised Operating Model to drive safety and productivity to “world-leading standards”.

“Integration into Anglo American’s global marketing network would provide full mine-to-market capabilities and build on Anglo American’s institutional experience in the world’s major fertiliser markets,” it added.

Sirius’ polyhalite product, POLY4, is a multi-nutrient fertiliser certified for organic use and has the potential to generate demand at a competitive cost that supports a strong margin, according to Anglo.

“POLY4 is an attractive low-chloride alternative to traditional potassium-bearing mineral products on a cost-effective basis. It includes four of the six key nutrients that plants need to grow – potassium, sulphur, magnesium and calcium,” it said. “The use of fertilisers is one of the most effective ways to improve agricultural yields and therefore help to address the anticipated future imbalance between food, feed and biofuel demand and supply caused by a fast-growing global population and limited additional land availability for agricultural use.”

Epiroc hands over drilling consumables facility to Monark

Epiroc has completed the divestment of its handheld drilling consumables manufacturing facility in Ockelbo, Sweden, less than two months after announcing the plan.

Epiroc sold the facility and its business to an affiliate of Monark AS, a rock drilling tools manufacturer based in Hof, Norway. The announcement of the planned sale in October came just before Epiroc said it had decided to restructure the manufacturing of its handheld rock drilling equipment and tools business in China.

The new owner will continue to supply Epiroc with products, mainly rods for handheld drilling, which are used by customers in construction and mining, Epiroc said.

The facility was part of Epiroc’s Rock Drilling Tools division and the approximately 40 employees who work at the facility were offered to transfer to the new owner.

Detour Lake acquisition to make Kirkland Lake Gold plus-1.5 Moz/y producer

Kirkland Lake Gold and Detour Gold Corp have entered into a definitive agreement will see the ASX- and TSX-listed miner become a plus-1.5 Moz/y gold producer through the all-share acquisition of Detour and its Detour Lake gold mine, in Ontario, Canada.

Under the terms of the transaction, which values Detour at C$4.9 billion ($3.3 billion), all the issued and outstanding common shares of Detour Gold will be exchanged at a ratio of 0.4343 of a Kirkland Lake Gold common share for each Detour Gold common share. Upon completion of the transaction, existing Kirkland Lake Gold and Detour Gold shareholders will own around 73% and 27% of the pro forma company, respectively.

Kirkland Lake says Detour Lake is a uniquely large-scale, long-life Canadian mine, with current production of around 600,000 oz/y and substantial growth potential.

The deal also solidifies Kirkland Lake’s position as a senior gold producer with pro-forma 2019 output targeted at more than 1.5 Moz and analyst consensus 2019 free cash flow of almost $700 million, Kirkland said.

The deal also increases Kirkland Lake’s mineral reserve base, adding 15.41 Moz to Kirkland Lake Gold’s mineral reserve base and extending its reserve life index by eight years.

The financial strength and technical expertise of the combined company is expected to support the continued optimisation and potential expansion of Detour Lake, Kirkland Lake said, explaining that opportunities exist to significantly increase production at improved unit costs and to expand current mineral reserves and mineral resources.

It also provides exploration upside, with Detour Gold’s land position covering 1,040 km2 along the northernmost sections of the prolific Abitibi Greenstone Belt (including 646 km² on existing Detour Lake property).

Tony Makuch, President and Chief Executive Officer of Kirkland Lake Gold, said: “The acquisition of Detour Gold is an excellent fit for Kirkland Lake Gold. We have already taken two mining operations, Macassa and Fosterville, and transformed them into high-quality assets that generate industry-leading earnings and free cash flow. The addition of Detour Lake provides an opportunity to add a third cornerstone asset that is located in our back yard in northern Ontario.

“Detour Lake will provide the pro forma company with a 20-plus year mine life which provides unparalleled optionality and excellent growth potential for the benefit of all shareholders. The management team at Detour Gold has done an exceptional job in making improvements and building momentum at the mine.

“Once the transaction is completed, we will continue efforts to optimise current operations and commence engineering work to evaluate expansion opportunities at Detour Lake, which we anticipate could lead to significant production growth, improved unit costs and higher levels of mineral reserves and mineral resources.”

Monadelphous after Chile mining exposure with Buildtek, Maqrent deal

Engineering company Monadelphous Group is expanding its South America presence through the acquisition of 75% stakes in Chile-based construction and maintenance services contractor, Buildtek SpA, and plant and equipment hire company, Maqrent SpA.

Buildtek provides multidisciplinary construction and maintenance services to the mining sector in Chile, having facilities in Antofagasta, Rancagua and Calama, and a head office in Santiago. Maqrent provides a range of plant, machinery and equipment for hire to Buildtek and external customers in the mining and construction sectors. Customers include major resources and energy companies such as Codelco, BHP, Albemarle, Anglo American and GNL Quintero. The business achieved an annual turnover in excess of CLP20 billion (A$24.7 million) in the last financial year.

Monadelphous Managing Director, Rob Velletri, said the acquisition formed part of the company’s markets and growth strategy, through the expansion of its existing services into new geographical regions. The announcement was the result of “significant efforts” over a number of years to understand the South American market, he added.

“The acquisition enables our entry into the growing Chilean resources market through an established and well-recognised operator. We will support Buildtek and Maqrent as they continue to grow and expand in the South American market,” he said.

Monadelphous is paying CLP5 billion in cash to acquire 75% of the companies, with an option to purchase the remaining 25% in three years’ time. The companies were founded in 2007 by Victor Valech and employ around 700 people. Valech will continue to manage and run the operations in Chile, with support from Monadelphous.

Mitchell Services ups pureplay drilling ante with Deepcore Drilling acquisition

Mitchell Services has agreed to acquire Deepcore Drilling for A$32 million ($22 million) in cash and shares, turning the ASX-listed company into, it says, one of the largest and most diversified pureplay drilling services companies in Australia.

The acquisition is expected to be 38.5% earnings per share accretive based on pro-forma financials and the agreed A$15 million cash and A$17 million shares deal.

Deepcore is a privately-owned company providing services to the mining and infrastructure sectors. It specialises in highly technical underground mobile drilling, including specialty acoustic drilling that Mitchell does not currently provide and deep hole directional diamond core drilling, the company said.

Mitchell has increasingly been expanding into new segments of the drilling market in order to capture market share and, in July, entered the drill and blast production drilling market with the award of a new contract at Adaman Resources’ Kirklalocka gold project in Western Australia.

Mitchell said Deepcore, which also carries out surface drilling, is primarily gold and copper focused, balancing the company’s existing commodity mix. It has 32 drill rigs and is involved with work primarily in Victoria and New South Wales, where Mitchell already has a small presence.

Deepcore is majority owned by founder Scott Tumbridge, who will be invited to join the Mitchell board as an Executive Director after the transaction is completed; expected to be by end-2019. Deepcore had 2019 financial revenues of A$46.5 million and EBITDA of $6.3 million.

NRW in the lead for BGC contract mining business

NRW Holdings, in response to recent media speculation, says it has been selected as the preferred bidder in the sale of BGC Contracting.

The company said it has consistently stated it is pursuing opportunities to “further diversify its revenues and enhance shareholder returns”, with this including discussions with various parties regarding potential acquisitions. This included talks with BGC Contracting.

Earlier this year, BGC Contracting’s owners, BGC Pty Ltd, said it was exploring options for the group’s national contract mining, maintenance and civil construction business.

While NRW confirmed its preferred bidder status for BGC, it said this status was subject to final documentation and a number of conditions considered “customary in this type of transaction”.

“NRW believes there is significant merit in the acquisition of BGC Contracting and would only enter into a transaction applying a similar discipline to previous transactions (Golding Group and RCR Mining Technologies) on terms that deliver appropriate value for NRW shareholders, including a requirement that any transaction be earnings per share accretive,” it said.

NRW said it has multiple funding options available to it and, furthermore, any transaction would include the assumption of outstanding equipment finance obligations of approximately A$190 million ($131 million), “which is well supported by a considerable fleet of major mobile equipment”.