Master Drilling considering three acquisitions
Global drilling services provider Master Drilling Group, which listed on the JSE in December, was currently considering three acquisitions, one of which was likely to materialise over the next three months, MD Danie Pretorius revealed on Monday.
In December, the company listed its ordinary shares in the Industrial Machinery sector of the JSE’s main board, raising R439.6-million before expenses
Pretorius said the company intended to use the proceeds primarily to fund its global growth strategy, which included acquisitions and organic growth. He pointed out that about half would be used to purchase six new raisebore machines and associated equipment in 2013 to expand into new geographical markets, such as Mexico, Peru, Mongolia, Colombia and the Democratic Republic of Congo.
He explained that the potential acquisition targets would be considered subject to strict criteria. “We look at the competence of the acquisition target’s management team; we will not buy a company unless management stays on board and enters some sort of service contract to service the company for another three years.”
He added that a profit warranty was also required, while the commodity, country and client base of the company that is to be purchased, was considered.
“For instance, in South Africa, you could not buy a company in the short term that involves platinum, but we would certainly consider a company that is involved in copper or zinc,” Pretorius noted.
Meanwhile, he added that the group aimed to maintain its yearly growth rate of 20%, 5% of which would be attributable to acquisitions and the balance to organic and new market development in 2013.
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