| Key Points: – Acquisition strengthens Major Drilling’s presence in Peru and expands access to Colombia, the Dominican Republic, and Spain. – Adds 92 drills, increasing Major Drilling’s fleet to 701, reinforcing its industry leadership. – Initial $63M payment, plus $22M potential earn-out based on Explomin’s EBITDA growth targets. |
In a strategic move to bolster its drilling capabilities and expand its footprint in South America, Major Drilling Group International Inc. has announced the acquisition of Explomin Perforaciones, a leading drilling contractor based in Lima, Peru. The deal, valued up to $85 million USD, is expected to significantly enhance Major Drilling’s access to the copper market and increase its service offerings in specialty drilling.
Explomin is one of the largest specialty drillers in South America, offering deep-hole, directional, high-altitude, and underground drilling services. The acquisition strengthens Major Drilling’s portfolio in copper and other essential minerals, which aligns with its growth strategy focused on geographical and service expansion.
In the twelve months ending October 31, 2024, Explomin generated approximately $95 million USD in revenue, with an EBITDA of $16 million USD, underscoring its solid standing in the industry. Around 90% of Explomin’s revenue is derived from partnerships with senior mining companies, a client base that Major Drilling expects to build upon.
Major Drilling’s CEO, Denis Larocque, highlighted the strategic value of this acquisition, noting that it aligns with the company’s long-term growth objectives, supports sustainable development goals, and builds on both companies’ shared cultural and operational values. Carlos Urrea, Chairman of Explomin, emphasized the potential for continued growth and praised the contributions of Explomin’s team, stating that the partnership would position both companies to thrive.
Under the acquisition agreement, Major Drilling paid an upfront cash amount of $63 million USD with the potential for an additional $22 million USD contingent on Explomin meeting specific EBITDA milestones over the next three years. This structure incentivizes Explomin to achieve an average annual EBITDA of $21 million USD during the earn-out period. Funding for this acquisition is supported by Major Drilling’s current cash reserves and debt facilities, reflecting the company’s strong financial position.
This acquisition positions Major Drilling to capitalize on increasing demand in the copper market and enhances its service portfolio in high-growth regions. The integration of Explomin is expected to be accretive, contributing positively to Major Drilling’s revenue streams and expanding its influence in the competitive mining sector.