TORONTO AND MARSEILLE, France, March 2, 2012 /PRNewswire/ - Foraco International
SA (the "Company" or "Foraco"), a leading global provider of
mineral drilling services, today announced it has entered into a
binding agreement to acquire WFS Sondagem LTDA, ("Servitec").
Servitec is the second largest mineral drilling
company in Brazil and has provided
diamond and reverse circulation drilling services for major and
junior mining companies in Brazil
since 2000. Headquartered in Crixas, Goias State and privately
owned, Servitec has activities in all of the main mining states of
Brazil: Minas Gerais, Goias, Para
and Mato Grosso. Servitec's
fleet consists of 86 rigs: 72 diamond rigs and 14 reverse
circulation drill rigs, as well as ancillary equipment, supported
by skilled managers and workers. In 2011 over 65% of
Servitec's business was derived from gold exploration, with 75% of
its total revenue being sourced from majors. Servitec
generated approximately US$ 70
million revenue in 2011 with an EBITDA margin of
approximately 24%.
The first step of the proposed transaction will
be the acquisition of a 51% controlling interest in Servitec, in
consideration for:
- Cash consideration of R$ 35.65
million or approximately US$ 20.6
million upon closing,
- 4,816,509 shares of Foraco, out of which 1,300,000 shares are
currently held by Foraco, which were acquired by Foraco on the open
market under the Company's previously announced Normal Course
Issuer Bids, and the balance of the shares will be through the
issuance of new shares
The closing of the transaction is scheduled to
take place in April 2012 and is
subject to the completion of certain conditions precedent,
including approval of the Toronto Stock Exchange and shareholder
approval of Foraco at a meeting of its shareholders scheduled to be
held in April 2012.
The parties have a call and a put option to
transfer the remaining 49% of Servitec's share capital. This second
step of the transaction is due to take place in 2015.
Servitec's current shareholders and managers
will continue managing and developing Servitec.
"This is a major step forward for Foraco to
continue implementing our strategy to build a world leading
drilling services company" said Daniel
Simoncini, Chairman and Chief Executive Officer of
Foraco. "Brazil is the fifth
largest country in the world by landmass, the sixth in mining
production and its economy represents more value, in dollar terms,
than all the other Latin American economies combined. Three out of
the five largest mining companies in the world have operations
there, and over the last decade, the mining industry has enjoyed
500% growth. This acquisition will allow us to enter a very active
market together with excellent partners, where we will develop
significant business synergies in the near future."
Jean-Pierre Charmensat, co-CEO and Chief Financial Officer
added, "In Brazil, the combination
of international experience, technical expertise and local
knowledge is widely recognized as being extremely effective in
providing quality drilling services in this challenging market.
This is why we are so enthusiastic about the combination of
Servitec's impressive track record, good reputation, energetic
management and market expertise with Foraco's support and global
strength. We believe this operation to be immediately accretive for
the benefit of Foraco's shareholders, as on a 2011 unaudited
proforma basis it represents an additional US$ 2.08 cents EPS, or 6%."
"Foraco's excellent reputation, strong financial
performances and impressive diversified asset base have convinced
Servitec's shareholders that joining the Foraco group is the best
solution to maximize shareholder value in the future," commented
Walid Khaoule, Co-Managing director of Servitec.
"We are excited about this unique opportunity to
further expand Servitec beyond our current scope of services, and
we are looking forward to exploiting new market opportunities and
bringing our business up to a new level in Brazil," commented Servitec Co-Managing
Director, Fernando Paiva.
Subsequent to this acquisition, FORACO will have
a total of 278 rigs.
About Foraco
Foraco International SA (TSX: FAR) is a global leading drilling
services company that provides turnkey solutions for mining,
energy, water and infrastructure projects. Supported by its
founding values of integrity, innovation and involvement, Foraco
has grown into the third largest global drilling enterprise with
operations in 22 countries across five continents. For more
information about Foraco, visit www.foraco.com.
Caution concerning forward-looking
statements
This press release may contain
"forward-looking statements" and "forward-looking information"
within the meaning of applicable securities laws. These
statements and information include estimates, forecasts,
information and statements as to management's expectations with
respect to, among other things, the future financial or operating
performance of the Company and capital and operating
expenditures. Often, but not always, forward-looking
statements and information can be identified by the use of words
such as "may", "will", "should", "plans", "expects", "intends",
"anticipates", "believes", "budget", and "scheduled" or the
negative thereof or variations thereon or similar
terminology. Forward-looking statements and information are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by management, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. Readers are cautioned that any such
forward-looking statements and information are not guarantees and
there can be no assurance that such statements and information will
prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed under the
heading "Risk Factors" in the Company's Annual Information Form
dated March 31, 2010, which is filed
with Canadian regulators on SEDAR
(www.sedar.com). The Company expressly
disclaims any intention or obligation to update or revise any
forward-looking statements and information whether as a result of
new information, future events or otherwise. All written and
oral forward-looking statements and information attributable to us
or persons acting on our behalf are expressly qualified in their
entirety by the foregoing cautionary statements.
SOURCE Foraco International S.A