Perenti’s proposed A$410 million (US$274 million) cash and scrip acquisition of fellow ASX-listed mining services company DDH1 will cement its status as the world’s third largest contract mining and drilling group behind Thiess and Indonesia’s PT Pamapersada Nusantara (PAMA).
The three sit above Australia’s NRW Holdings, Byrnecut and Macmahon on mining’s global contractor league table. The Australian companies, except privately-owned Byrnecut, have led heavy consolidation in the sector over the past 7-8 years.
The deal will also give a combined Perenti-DDH1 an active drilling fleet nearly half the size of the world’s biggest mineral drilling contractor, Boart Longyear, which had 617 rigs available in the first quarter this year. Perenti-DDH1 would have about 290.
Perenti, which outlined a growth focus on Australia and North America in a strategy briefing earlier this month, will have annual revenue of circa-US$2305 million with DDH1 on board.
It expects a pro forma market capitalisation of cA$1.3 billion to enhance its liquidity through possible ASX 200 index inclusion.
Perenti’s share price was down about 10% today to A$1.15, capitalising the company at $788 million.
As well as improving its high-growth underground service business with the addition of the former Swick Mining Services portfolio DDH1 bought for US$85 million in 2021, an enlarged Perenti will increase its exposure to base metals and copper, and to the Australian market.
“For the first time we will see our percentage of revenue from gold below 60%, with copper and nickel exposure increasing to 25%,” CEO Mark Norwell said.
Australia will account for 54% of the group’s revenue, compared with 47% for Perenti now.
The deal is expected to close in September.
