- Dynamic Group (DDB) will acquire Welldrill from Peter Chegwidden for a total consideration of $19 million
- The total consideration includes a $15 million upfront consideration which comprises of $14 million cash upon completion of the deal and $1 million in Dynamic shares
- The company believes the acquisition will transform the scale of Dynamic into a larger, more diversified and stronger business
- Also, Dynamic Group established a new $18 million acquisition finance facility with the Commonwealth Bank of Australia
- Shares in Dynamic Group have ended the day up 8.47 per cent, trading at 32 cents at market close
Dynamic Group (DDB) will acquire Welldrill from Peter Chegwidden for a total consideration of $19 million.
The total consideration includes a $15 million upfront payments which comprises of $14 million cash upon completion of the deal and $1 million in Dynamic shares, and another $4 million deferred cash payable at March 31, 2023.
In addition, the company will incur up to $4 million in capital costs post completion of the transaction in relation to the purchase of the newly built Rig-6 Fleet which is expected to arrive in October.
The acquisition will provide significant headroom to increase fleet utilisation and a defensive revenue stream with increased exposure to government contracts and production mining.
Further, the company believes the acquisition will transform the scale of Dynamic into a larger, more diversified and stronger business, reiterated by Managing Director Mark Davis.
“Welldrill is expected to provide a critical third limb to our existing drill and blast, and exploration and resource definition drilling services.
“The acquisition is consistent with the growth strategy we have articulated since our listing in mid-2020 with Welldrill providing a complementary service offering, increased customer diversification and scale to drive cost efficiencies.”
Mr Davis also welcomed the addition of Welldrill General Manager Tim Westcott to the executive management team which he said is a “a well-regarded and industry leading drilling executive”.
The company also established a new $18 million acquisition finance facility with the Commonwealth Bank of Australia.
In parallel, Dynamic has upsized its asset finance facilities to provide additional
liquidity to finance the purchase of the Rig-6 Fleet.
Dynamic and Welldrill fleets are said to be well maintained and capitalised, which is expected to reduce ongoing capital costs over the foreseeable future.
Shares in Dynamic Group were up 8.47 per cent, trading at 32 cents at market close.