Atlantis lifts Master Drilling

Master Drilling, one of the world’s leading raise-bore drilling companies, has bought SA’s Atlantis Group for R107m.

Master Drilling, one of the world’s leading raise-bore drilling companies, has bought SA’s Atlantis Group for R107m, boosting its order book and fleet size as it gains new clients.

This is the second major purchase of another drilling company by Master Drilling, which has already bought Bergteamet, a Swedish company working in Scandanavian countries and now increasingly in Europe.

Master Drilling will fund the R107.5m purchase price from its cash resources over the next year, subject to the fulfillment of various conditions.

Atlantis has 25 drilling machines of which 15 would be utilised by Master Drilling, taking the size of its own fleet up to 143, said CFO Andre van Deventer. The other 10 machines did not fit Master Drilling’s strategy and were assigned no value, he said.

“It gives Master Drilling equipment that was urgently needed to service the market in line with current demand. With the revenue to be added to the group it also gives Master Drilling scale benefit which should convert into better return on capital employed,” he said.

The contracts that came with Atlantis would grow Master Drilling’s committed order book by $15m. By the end of June 2018, the company had a committed order book of $114m.

“The acquisition of Atlantis Group will further strengthen Master Drilling’s international footprint and augment its pool of skills and expertise, especially in India, Brazil and Zambia where both Master Drilling and Atlantis have active raise-boring businesses. In SA, the acquisition comprises a mining suppliers and parts manufacturing business,” said Danie Pretorius, CEO of the Fochville-based firm.

As Master Drilling’s contract with the Kibali gold mine built by Randgold Resources and AngloGold Ashanti in Democratic Republic of Congo winds down, the company’s exposure to the rest of Africa will decrease but it is looking for opportunities in Zambia and Ghana, where AngloGold is redeveloping the Obuasi gold mine and Master Drilling hopes for a contract.

Atlantis specialises in raise boring, blind boring and a host of other drilling services. Raise boring is the development of a vertical tunnel by pulling a drilling head from one excavation to another or to the surface, while blind boring entails sinking a tunnel.