Mining Services, News

DDH1 formalises merger with Swick


DDH1 has signed a binding agreement with Swick’s drilling business to create a new entity that will deliver an estimated $445 million in revenue.

The binding scheme implementation agreement involves 0.2970 DDH1 shares for each Swick share held by Swick shareholders.

Swick stated this represents $0.35 per Swick share and values the company at $115 million.

DDH1’s board has unanimously approved the proposed merger to create a combined drilling business.

“The DDH1 board is delighted that we have been able to formalise the in-principle agreement we announced to shareholders on 12 October 2021,” DDH1 chairperson Dian Smith-Gander said.

“This is a milestone moment for DDH1, and an exciting time for our shareholders as we execute on the disciplined growth strategy we outlined during our ASX listing process in March 2021.”

“Partnering with the leading underground diamond driller in Australia is a highly complementary step for DDH1 and a natural evolution to our specialised surface drilling operations.”

Swick confirmed its shareholders will also receive Orexplore shares once the entity is emerged from the company.

“As announced on October 12, the proposed scheme does not impact Swick’s announced plan to demerge Orexplore, with Swick shareholders to also receive Orexplore shares in addition to DDH1 shares,” Swick stated.

Swick shareholders will own 19.7 per cent of the combined drilling business once finalised.

The $0.35 offer value for Swick shareholders represents the highest share price since 2013.

The merger will combine both surface and underground drilling with a fleet of 170 drill rigs.

According to Swick, the merger gives the company an enterprise value of $115 million.

Swick shareholders are expected to meet in January 2022 to vote on the scheme, with the company’s board unanimously recommending that shareholders accept the offer.

“Like our brands DDH1 Drilling, Ranger Drilling and Strike Drilling, the Swick name commands enormous respect in the Australian mineral drilling sector for the safe and high-quality service delivered to clients,” DDH1 non-executive director and co-founder Murray Pollock said.

“Kent Swick and his team have built a great business that is aligned – culturally and strategically – with our company’s vision and values.

“DDH1 is well placed to help Swick deliver on its full growth potential as they deploy engineering innovations and services that demonstrate a deep understanding of their customer requirements.

“The combination of DDH1 and Swick is a defining moment within the mineral drilling industry, and I look forward to the opportunities created and to my continuing involvement and support of the DDH1 group of companies.”

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