Major Drilling Expands into South America with Explomin Acquisition
Deal News | Nov 05, 2024 | Globenewswire
Major Drilling Group International Inc., a global leader in specialized drilling services, has announced its acquisition of Explomin Perforaciones, a top-tier drilling contractor based in Lima, Peru. With a payment structure combining an upfront cash payment of $63 million and an earn-out possibility of up to $22 million, the total deal could amount to $85 million (approximately C$115 million). The acquisition is set to enhance Major Drilling’s presence in the copper-rich regions of South America, including Peru, Colombia, Dominican Republic, and Spain. Explomin brings with it a fleet of 92 drills and a strong market reputation, with most revenue derived from senior mining companies. This strategic acquisition aligns with Major Drilling’s growth plans and is anticipated to be immediately accretive. It positions the company as the world's largest mineral drilling service provider by total rig count, now at 701. The management team of Explomin, led by Chairman and Founder Carlos Urrea, will remain in place to continue driving growth. This deal highlights the growing importance of South America in global mining operations, with Peru's position as the second-largest copper producer further solidifying the appeal of this acquisition.
Sectors
- Mining and Drilling
- Private Equity and M&A
Geography
- South America – The acquisition targets Explomin Perforaciones, a company based in Peru, impacting the mining industry across multiple countries in the region, including Colombia, the Dominican Republic, and Spain.
- Canada – Major Drilling Group International Inc., headquartered in Canada, is the acquirer in this transaction, reflecting its strategic expansion into South American markets.
Industry
- Mining and Drilling – The acquisition involves specialized drilling services in the mining sector, focusing on regions rich in copper and other minerals in South America.
- Private Equity and M&A – The transaction is a strategic merger and acquisition within the industry, reflecting on the companies' growth and market expansion strategies.
Financials
- US$63 million – Upfront cash payment made by Major Drilling for the acquisition of Explomin.
- US$22 million – Additional earn-out available based on EBITDA growth milestones, making the transaction potentially worth up to US$85 million.
- US$95 million – Revenue generated by Explomin for the twelve-month period ending October 31, 2024.
- US$16 million – EBITDA generated by Explomin for the twelve-month period ending October 31, 2024.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Major Drilling Group International Inc. | Acquiring Company | Company | A leading provider of specialized drilling services primarily serving the mining industry, listed on the TSX. |
| Explomin Perforaciones | Target Company | Company | A leading specialty drilling contractor based in Lima, Peru, servicing South American markets. |
| Denis Larocque | CEO | Person | President & CEO of Major Drilling, overseeing the strategic acquisition. |
| Carlos Urrea | Chairman and Founder | Person | Chairman and Founder of Explomin Perforaciones, will maintain leadership position post-acquisition. |