Major Drilling Announces Purchase of Forage à Diamant Benoit Ltée
Saturday, August 2nd 2008
Major Drilling Group International Inc. announced that it has completed the purchase of the exploration drilling company Forage à Diamant Benoit Ltée (“Benoit”) based in Val-d’Or, Québec (Canada) for an aggregate purchase price of $21,000,000 (consisting of approximately $17.5 million in cash and $3.5 million in liabilities) subject to customary price adjustments.
Through this purchase Major Drilling has acquired 19 drills rigs, the majority of which have deep hole capacity and are fitted with rod handlers, which fits with the Company’s strategic focus on specialized drilling. In addition to the rigs, this acquisition involves support equipment and inventory, existing contracts, and personnel. Subsequent to the acquisition, Major Drilling will have a total fleet of 42 mineral exploration drill rigs in Québec. Management anticipates that the operations of Benoit will produce additional annual revenue of approximately $26 million and additional EBITDA of approximately $7 million for the twelve months subsequent to the acquisition.
The purchase price is payable, in total, by way of cash consideration financed through existing credit facilities of the Company, and is subject to certain holdbacks.
Francis McGuire, President and CEO of Major Drilling, stated “We are very pleased to welcome Forage Benoit and its employees into the Major Drilling group. This acquisition provides us with additional assets, experienced drillers and existing contracts in Québec. Benoit has operated successfully in the Quebec/Ontario marketplace for some 40 years, and has a strong reputation with its clients.”
Mr. McGuire added “We believe that from the perspective of resources and resource potential, political risk, and financial incentives to the mining industry, Quebec is one of the best jurisdictions in the world for mining companies to do business. We remain very optimistic about the continuing growth potential of this region. Also, given the strong demand and the Company’s favorable financial position, the Company still expects net capital expenditures to reach a record of $80 million in fiscal 2009, above and beyond the purchase price for this acquisition.”
Based in Moncton, New Brunswick, Major Drilling Group International Inc. is one of the world’s largest metals and minerals contract drilling service companies. To support its customers’ mining operations and mineral exploration activities, Major Drilling maintains operations in Canada, the United States, South and Central America, Australia, Indonesia, Mongolia, Armenia, and Africa.