Business
Major Drilling Announces Purchase of Chilean Drilling Operation
Major Drilling Announces Purchase of Chilean Drilling Operation.
About this update from Major Drilling Group International Inc.
[{"type":"text","content":"\n\n\n\nMONCTON, NB, Sept. 6 /CNW/ - Major Drilling Group International Inc.\n(TSX: MDI) ("Major Drilling" or the "Company") is pleased to announce that,\nthrough its wholly owned Chilean subsidiary, it has signed an agreement to\npurchase the exploration drilling company Harris y Cia Ltda. ("Harris").\n\n\nThrough this purchase Major Drilling will acquire 11 drills rigs, all of\nwhich are currently committed to work on a double shift basis conducting\nmainly specialized drilling in the active northern region of Chile. In\naddition, the acquisition involves all support equipment and inventory, as\nwell as the Antofagasta office and repair facilities owned by Harris. This\nacquisition provides attractive synergies to assist the Company in fulfilling\nits strategy of fully servicing the Chilean specialized drilling market.\nSubsequent to the acquisition Major Drilling will have a total fleet of 35\ndrill rigs in Chile, and the similarity of the Harris and Major Drilling rigs\nwill produce operational efficiencies.\n\n\nAs part of this acquisition Major Drilling is also acquiring Harris'\nexisting contracts and retaining key management personnel, as well as other\nemployees, including a number of experienced drillers.\n\n\nThe purchase price for the transaction is US$22.7 million, subject to\ncustomary working capital adjustments, to be financed with cash and debt.\n\n\nFrancis McGuire, President and CEO of Major Drilling, stated "We are very\npleased to welcome Harris Drilling and its employees into the Major Drilling\ngroup. Harris has been operating in Chile since 1981, and has an excellent\nreputation with its clients. This acquisition provides us with additional\nassets, experienced drillers and existing contracts in Chile. We anticipate\nthat the operations of Harris will produce additional revenues of\napproximately US$11 million for the balance of our fiscal year, ending April\n30, 2008. "\n\n\nThe transaction is expected to close by mid-September.\n\n\nSome of the statements contained in this press release may be\nforward-looking statements, such as estimates and statements that describe or\nare with respect to the future price of minerals and metals, the Company's\nfuture plans, objectives or goals, including words to the effect that the\nCompany or management expects a stated condi...