Master Drilling makes another major purchase with Atlantis deal
Master Drilling, one of the world’s leading raise-bore drilling companies, has agreed to pay R107.5m to buy SA’s Atlantis Group, which is involved in similar drilling work.
This is Master Drilling’s second major purchase of another drilling company. It has already bought Bergteamet, a Swedish company working in Scandanavian countries and now increasingly in Europe.
Master Drilling will fund the purchase price from its cash resources over the next year, subject to the fulfilment of various conditions, including statutory and regulatory approvals.
"The acquisition of Atlantis Group will further strengthen Master Drilling’s international footprint and augment its pool of skills and expertise, especially in India, Brazil and Zambia, where both Master Drilling and Atlantis have active raise-boring businesses. In SA, the acquisition also comprises a mining suppliers and parts manufacturing business," said Danie Pretorius, CEO of the Fochville-based company.
As Master Drilling’s contract with the Kibali gold mine built by Randgold Resources and AngloGold Ashanti in Democratic Republic of Congo winds down, the company’s exposure to Africa will decrease but it is looking for opportunities in Zambia and Ghana, where AngloGold is redeveloping the Obuasi gold mine and Master Drilling hopes for a contract.
Atlantis specialises in raise boring, blind boring and a host of other drilling services. Raise boring is the development of a vertical tunnel by pulling a drilling head from one excavation to another or to the surface, while blind boring entails sinking a tunnel.
"In addition, we expect that the deal will have a positive effect on earnings whilst also reducing our capex (capital expenditure) requirement for the year," he said.
Master Drilling will lend Atlantis’s empowerment partner Laone Mining & Engineering three raise-boring machines to fulfil a contract with Petra Diamonds’ Cullinan mine, an operation where Master Drilling has done work.
"This transaction also provided a great opportunity to support an ambitious and driven, 100% black-owned engineering business with the appetite to make their mark in the raise-boring industry," Pretorius said.