DDH1 (ASX:DDH) will be removed from the official list on the Australian Securities Exchange (ASX) at the close of trade today (9 October 2023) following the implementation of the scheme of arrangement with Perenti (ASX:PRN).
Perenti’s acquisition of the mining services firm will create a major ASX contract mining services group.
Also today, Perenti announced the launch of an on-market share buyback program. Following the implementation of the DDH1 scheme of arrangement, the company has approved an on-market share buyback program to purchase up to 60 million Perenti shares.
Perenti says the exact timing and actual number of shares to be purchased under the buyback program will depend on market conditions, available trading windows, the prevailing share price, and other considerations.
The buyback will be conducted within the ‘10/12 limit’ under the Corporations Act 2001 (Cth) and will not require shareholder approval.
Mark Norwell, Perenti’s Managing Director and Chief Executive Officer says with the finalisation of the acquisition of DDH1 and having visibility over the strengthened balance sheet and free cash generation of the newly combined business, the company believes a buyback of shares at current levels represents a value accretive opportunity that maximises shareholder value.
“Given the significant value proposition that the newly combined Perenti business represents, we believe that the current share price does not accurately reflect the underlying value of Perenti“
“Given the significant value proposition that the newly combined Perenti business represents, we believe that the current share price does not accurately reflect the underlying value of Perenti.”
On 27 September 2023, Mining.com.au reported the Federal Court of Australia approved the scheme of arrangement where Perenti would acquire 100% of the shares in DDH1.
DDH1 has 4 brands – DDH1 Drilling, Ranger Drilling, Strike Drilling, and Swick Mining Services. Together they offer a global scale mineral drilling company with operations throughout Australia, North America, and Western Europe.
The company has 195 rigs and one of the top 5 largest fleets globally (about 60% surface and 40% underground). Its drilling services are commodity agnostic and it has exposure to a diverse range of commodities including gold, iron ore, nickel, copper, and other critical metals. DDH1 has no exposure to coal.
DDH1 offers a broad range of specialty drilling services across the mining value chain and has a reputation for quality and service delivery.
The firm’s revenue is predominately derived from the production and resource definition phase, which is less cyclical.
DDH1 and Perenti are scheduled to exhibit at the upcoming International Mining and Resources Conference (IMARC) held in Sydney from 31 October to 2 November 2023. Mining.com.au is an official media partner of IMARC, which will showcase 500-plus mining leaders and resource experts throughout 7 concurrent conferences.
Write to Adam Orlando at Mining.com.au
Images: Perenti
