Aspen Technology (NASDAQ:AZPN) is due to close the $900 million acquisition of Perth-based mining services technology services company Micromine from private equity firm Potentia Capital this coming quarter.
In July 2022, ApenTech, which is a global industrial software company, entered into a definitive agreement to acquire Micromine, a Western Australian design and operational management solutions provider for the mining industry in an all-cash deal.
ApenTech says the pending acquisition, which is expected to close in the next quarter subject to receipt of regulatory approvals, complements its existing asset optimisation solutions. The suitor notes that it will position the company in a leadership role to deliver the ‘Digital Mine of the Future’, in support of excellence in operations with a focus on safety, sustainability, reliability, and efficiency.
In addition, once inked the transaction will uniquely position AspenTech to help mining customers address the dual challenge of meeting the demands of a growing population with an increasing standard of living, while reaching sustainability goals, the company says.
AspenTech has retained Goldman Sachs and Atrico as financial advisors to the deal and DLA Piper is acting as legal counsel. JP Morgan is serving as financial advisor and Johnson Winter & Slattery is acting as legal counsel to Micromine, Potentia Capital, and the other sellers.
In July 2022, AspenTech said it intends to finance the Micromine transaction through a combination of cash at hand and additional debt. At the time the company entered into a commitment letter with JP Morgan Chase Bank, which committed to provide an unsecured $475 million bridge term loan, subject to customary limited conditions.
In January this year, AspenTech reported as of 31 December 2022 it had cash and cash equivalents of US$446.1 million and total borrowings of US$264 million. During the period since the deal was announced, the company also entered into a credit agreement with Emerson for an aggregate loan commitment of US$630 million with the proceeds principally to be used to fund the pending acquisition.
Micromine is expected to be accretive to AspenTech on a free cash flow basis within the first 12 months of the transaction closing
Micromine is expected to be accretive to AspenTech on a free cash flow basis within the first 12 months of the transaction closing.
Micromine participates in the ‘Smart Mining Market’, a global market which in 2022 was valued at US$11.5 billion. Based on Micromine’s technology, AspenTech says its relevant global segments of the total market is US$5.3 billion.
With a 35-year history and 280 employees across 22 global offices, Micromine provides mission critical solutions for over 800 blue-chip customers across all mining operations and commodities with a focus on various metals essential for the energy transition such as lithium, cobalt and nickel, base metals such as copper and iron ore, and precious metals such as gold.
Meanwhile, on 10 March Mining.com.au reported AspenTech had rolled out a new emissions management tool that enables asset-intensive organisations pinpoint and act on key operational areas with the biggest impact on carbon emissions. The trademarked AspenTech Operational Insights unites, correlates, analyses, and visualises company-wide data to assist with real-time decision-making on areas affecting sustainability.
Write to Adam Orlando at Mining.com.au
Images: AspenTech Inc & iStock
