Major Drilling Group has entered into an agreement to acquire Norex Drilling, a family-owned drilling company and leading exploration drilling contractor based in Timmins, Ontario, Canada.

The purchase price for the acquisition is valued at an amount up to C$19.7 million ($14.8 million), consisiting of cash and shares.

Denis Larocque, President & CEO of Major Drilling, said Norex had been operating successfully in the Ontario marketplace for around 40 years and had a solid reputation with its clients.

“The acquisition of Norex is a unique opportunity for Major Drilling to gain a strong position to service our customers in both surface and underground exploration drilling services in the prolific northeastern Ontario region,” he said. “The culture and operational values of both companies are very similar in terms of personnel and strategies, and this will allow us to provide our customers with expanded drilling services.”

Major Drilling is retaining the management team, is gaining access to skilled and experienced drillers and personnel, and is taking over existing contracts, according to the company.

Through the purchase, it will also acquire an additional 22 drill rigs, including 17 compatible specialised surface drill rigs and five underground drills, together with related support equipment and inventory.

For the last two years, Norex had average yearly revenue of approximately C$21 million and EBITDA of aroundC $5 million.

The company said: “While Norex’s historical performance should not be viewed as guidance for future performance, we are optimistic about the continuing growth potential in this region considering Norex’s customers’ stated plans and the current market condition in the mining industry.”

The acquisition is expected to close on or about November 1, 2019, and is subject to customary closing conditions.