boart longyear ipo any thoughts, page-4

google search boart longyear news ... this share has been brought to my attention from a couple of old blokes...... march1 Boart to raise $2.7b in share offer



Macquarie Bank-backed global drilling services contractor Boart Longyear Ltd plans to raise up to $2.7 billion in a public offer of shares in Australia.

The offer by the US-based Boart will be the second largest share sale in Australia, ranking behind Telstra's $15.5 billion T3 offer last year.

Boart is one of the world's largest drilling contractors and manufacturers, has over 100 years' experience and operates in about 30 countries, including Australia.

"This is an exciting new phase for the company," Boart chief executive Paul Brunner said.

"We have a clear competitive advantage, we are the only people in the world that both manufacture the tools we use and apply them through our services business.

"There is a $10 billion opportunity in front of us, in the minerals business we are currently number one, but our market share is in the high teens and we have a lot of head room."

The initial public offer will raise between $2.26 billion and $2.65 billion, with shares offered at a price between $1.76 and $2.10 each.

Boart was divested out of major miner Anglo American in 2005 for $545 million to Advent Corporation, Bain Capital and senior Boart management.

A Macquarie Bank-backed consortium bought a 60 per cent stake in Boart in 2006.

Over the last two years it has moved its operational head office from Johannesburg in South Africa to Salt Lake City in the US and rationalised 14 production facilities to 11.

"These changes are starting to deliver results and these initiatives are expected to continue to drive growth in the medium term," Mr Brunner said.

He flagged growth through acquisitions as a key part of the company's strategy, with Boart holding a list of more than 100 potential targets.

"We have an awful lot of growth opportunities, I'm not going to go into great detail ... (but) acquisitions are the key part of what we do," he said.

"Suffice to say that we have a longer list of well over 100 identified opportunities."

Boart has been active in the past six months acquiring six businesses, including DrillCorp and North West Drilling in Western Australia and Prosonic and Connors in the Americas.

Mr Brunner also flagged the company's ambition to become the `contractor of choice' for big mining companies.

"We do business with all of the top mining companies in the world, the big boys, 45 per cent of our revenue comes from that group of key players," he said.

"The BHP's, the Rio Tinto's, the CVRD's, the Anglo American's, we have something like 22 per cent of their global market share for drilling.

"We have set ourselves a target over the next number of years to get that up to 50 per cent."

The company has forecast pro-forma revenue of about $US1.46 billion ($A1.86 billion) for calendar 2007.

Mr Brunner said the company had canvassed listing in Canada and the United States but Australia had come out on top because of its closeness to Asia and booming markets.

"The Australian market and I think the Australian population feel the impact of the growth in China and India everyday," he said.

The retail offer will open to Australian and New Zealand investors on March 12 and close on March 28.

The institutional offer will be made via a bookbuild and is due to open on April 2 and close on April 3, with a listing on the Australian stock exchange to follow soon after.

Following the share sales, the Macquarie Bank consortium is expected to hold about two per cent of the company, management 3.5 per cent and existing institutional investors 10 per cent.

Advent Corp and Bain Capital will divest their holdings.