The provisional purchase consideration to be paid by MDMS is R78,6 million
Master Drilling announces acquisition of stake in A&R Group. (Credit: Adam Radosavljevic from Pixabay)
Master Drilling Mining Services (Pty) Ltd. (“MDMS”), a subsidiary of Master Drilling, has entered into various agreements with the A&R Group in respect of the acquisition of an interest just above 25% in the A&R Group (comprising A&R Engineering and Mining Supplies (Pty) Ltd., Lamp Room Solutions and Consulting (Pty) Ltd., Moxie Digital (Pty) Ltd. and Embedded IQ (Pty) Ltd.) (“the Acquisition”, and these companies collectively “the A&R Group”), with options to MDMS to subsequently acquire control of the A&R Group at the discretion of MDMS. MDMS has an option to acquire the remaining 75% interest, subject to certain conditions, within 90 days after the expiry of two years. MDMS will, however, enjoy minority protection rights that are normal in transactions of this nature.
Nature of business of the A&R Group
The Acquisition provides for the purchase by MDMS of just above 25% of the equity in and shareholders loans to the A&R Group, as well as intellectual property, from existing shareholders of the A&R Group in respect of:
(i) A&R Engineering and Mining Supplies (Pty) Ltd.;
(ii) Lamp Room Solutions and Consulting (Pty) Ltd.;
(iii) Moxie Digital (Pty) Ltd.; and
(iv) Embedded IQ (Pty) Ltd.
Founded in 1978 as A&R Engineering and Mining Supplies (Pty) Ltd. , the A&R Group initially supplied underground traction batteries for locomotives, battery chargers and locomotive controllers for horizontal transport in the gold mining sector. Since then, the A&R Group has evolved over the years to become a leading operator in the underground rail bound and trackless equipment hardware environment in terms of management systems and intelligent devices installed across various mining operations.
Lamp Room Solutions and Consulting (Pty) Ltd. (“LSC”) commenced operations in 2000, initially providing full outsourcing of the lamp room operation in the mining Industry. The core of LSC’s offering is the Comprehensive Mine Management System (CMMS). CMMS system (software) undergoes continual enhancement and development and together with the hardware supplied has enabled LSC to become a leader in this field within the mining Industry, currently managing in excess of 100 000 miner lamps on a daily basis over a wide geographical area. The ongoing need and drive for intelligent management information is constantly driven by the end user in the mining industry, and this service is provided by Moxie Digital (Pty) Ltd. (“Moxie”), whose area of expertise is centered around providing reporting and data visualization as well as 24/7 software support for the CMMS.
Since acquiring an interest in Embedded IQ (Pty) Ltd. (“EIQ”), a Johannesburg based R&D business, over a decade ago, the A&R Group has developed proximity avoidance hardware for underground rail bound and trackless vehicles to facilitate safe and efficient mining. Equipment and systems supplied by the A&R Group track the movement of more than 50 000 people and machines underground in South Africa daily and, through specialized hardware, allow missing personnel to be located.
Effective date
The effective date of the acquisitions is 31 July 2021.
Purchase consideration
The provisional purchase consideration to be paid by MDMS is R78,6 million. The final purchase consideration, to be determined in accordance with an agreed formula on the finalisation of the 2022 Annual Financial Statements of the A&R Group, may be higher if the said businesses materially improve their current performance, but capped to a maximum of R210,4 million.
Source: Company Press Release