2023 General, news, etc, page-26

Ooohhh !

Re the last paragraph of the post above to which I am replying, it turns out Bridget Carter might be thinking along somewhat the same lines!

And likely with more authenticity.

She’s been talking to ‘People-Who-Know’ about the sector and whilst it’s a bit vague NRW (with more than $200m in the bank?) does get a mention both in regards interest in tech and/or/instead of consolidation.

Here’s her Data Room story published in The Australian on February 8:

Spoiler : NRW turning Techish?

https://www.theaustralian.com.au/bu...s/news-story/26f707244c8dcf4694e4b20ccb52329c

Services providers mining for technology targets

Having a volume of services where they are a one-stop-shop is everything for mining services providers.

• By BRIDGET CARTER
  DATAROOM EDITOR
  @BridgetCarterb
• 8:06PM FEBRUARY 8, 2023

Australian mining services providers are looking at acquisition opportunities, but not ones that you may expect.

Instead of them weighing companies that are operating in their same area of expertise, DataRoom has learned some are thinking about buying businesses in the technology space.
The logic for doing so is that it may help their company’s share price performance.

Having a volume of services where they are a one-stop-shop is everything for mining services providers, and by going up the technology chain, the logic is their services are worth more and there is less competition.

Some believe it may be hard for such firms to compete in the area with other private equity companies and technology companies.
But mining services companies have been out of favour with the market for years because of the huge costs to operate and update their machinery along with volatility linked to the resources industry.

It is the reason why Australian-listed services company Downer staged an exit from the sector, offloading its mining services assets to various buyers.

Exposure to the coal sector is also a reason environment-conscious companies are being shunned by the market.

Mining services providers Emeco, Macmahon Holdings and NRW Holdings are among the listed groups in the sector, and while consolidation makes sense, none so far have been able to agree on value, with the company boards taking the view that they are grossly undervalued by the market.

CIMIC’s German parent Hochtief privatised the company with assistance from Hochtief’s Spanish parent company ACS.
Thiess, jointly owned by CIMIC and Elliott, purchased Australian-listed mining services provider MACA last year.

Most want to take a similar path to the Australian-listed IMDEX, which has been well rewarded by the market.
The mining tech company develops cloud-connected sensors and drilling optimisation products to improve the process of identifying and extracting mineral resources for drilling contractors and resource companies globally. Its main brands are AMC and REFLEX.
Shares in IMDEX have rallied from about $1 five years ago to $2.47 today, taking its current market value to $1.18bn.
IMDEX itself has been on the acquisition trail in the technology space.
Last month, it agreed to buy Devico for $324m including debt, using a $224m entitlement offer and placement to help fund the transaction.
The acquisition target is a global mining-tech company, established in 1988 and based in Norway, generating about $29m of annual earnings before interest, tax, depreciation and amortisation.
It was purchased at 11.2 times its forecast 2022 EBITDA.
The business has a particularly strong position in Europe and compliments the core business of IMDEX.
Goldman Sachs advised on the transaction, while JPMorgan helped to provide the debt.

Explosives supplier Orica has also been looking at technology-focused businesses when it comes to acquisition targets.
It purchased Axis Mining last year, which provided data and drilling solutions for the mining, minerals, exploration and drilling industries.

cheers