The UIS business, which provides underground in-seam drilling for mine exploration, mine dewatering and coal mine methane gas drainage, would enable Industrea to roll out a fully integrated gas management solution on an accelerated basis.
The business will combine with Industrea’s newly formed gas management division to service clients such as Anglo Coal, Centennial Coal, Xstrata and Rio Tinto, managing director Robin Levison said.
“The acquisition and integration of the UIS business will augment Industrea’s new gas management division and allow us to provide a broader and enhanced gas management solution to both Australian and international clients, especially in China and Russia,” he said.
“The transaction provides Industrea with further earnings diversification and a client base which includes many of the industry’s leading operators.
“The addition of the UIS business is part of Industrea’s strategic objective to selectively target earnings enhancing bolt-on acquisitions and to pursue high-margin opportunities across related sectors.”
The AJ Lucas UIS business is currently the second-largest underground in-seam drilling provider in Australia, with about 44% market share and 45 staff, including a dedicated operational management team.
The acquired fleet includes seven drilling rigs and eight survey systems.
“Over recent months Industrea has leveraged its experience to develop and manufacture an Industrea drill rig which, when incorporated with the unique AMT Drill Guidance System, represents a clear technological step change over existing gas drainage solutions,” Levison said.
AJ Lucas chairman and chief executive Allan Campbell said: “The underground business is being sold because it is considered more of a mining services activity and therefore outside the company’s core drilling services capability. In addition, it will free up resources to focus on our surface drilling and well management activities.
“The sale proceeds will also strengthen our balance sheet and increase funding head room, both of which were impacted by the heavy rainfall at the end of last year.”
Completion of the acquisition is expected March 15 and is not expected to require regulatory approval.
