Less than a month after the proposed deal was first announced, Major Drilling Group International (MDI-T) closed out September by wrapping up its acquisition of smaller, fellow drilling company Bradley Group Ltd. of Rouyn Noranda, Que.
Major Drilling paid Bradley’s owners $72 million on closing, with another $8 million due over the next three years.
Major Drilling has added Bradley Group’s 124 rigs to its base of 577 rigs.
Strategically, Major Drilling notes that the the deal brings in Bradley’s greater emphasis on central Canada and the gold industry, and the addition of Bradley Group’s rigs, 80% of which are surface drilling rigs and the rest being underground diamond drilling rigs, furthers its focus on specialized drilling.
The purchase brings on board Bradley Group’s workforce of 860 employees, its management team and existing contracts in Canada, the Philippines, Colombia, Mexico and Suriname.
Based in Moncton, N.B., Major Drilling now boasts a total fleet of 701 rigs and 5,220 employees.
To pay for the deal, Major Drilling has completed a bought-deal financing with a syndicate of underwriters led by TD Securities that resulted in the issuance of 5.9 million shares at $11.90 apiece for gross proceeds of $70 million.
There’s also an over-allotment option that could bring another $10.5 million.
At the same time, Major Drilling refreshed $100 million in credit lines with the Bank of Nova Scotia and TD Bank.
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