Critical minerals exposure was a key drawcard for a Canadian company behind the $125 million purchase of ambitious Osborne Park mining services group Iron Mine Contracting.
Osborne Park mining services group Iron Mine Contracting has been sold by its founders to a major Canadian company for $125 million.
North American Construction Group, based in the Canadian resources province of Alberta, announced overnight the deal to acquire IMC, a diversified mining services contractor founded a decade ago by chief executive Clinton Keenan and chief operating officer Derek Williamson.
The founders will remain with the business to drive its expansion plans backed by its big new parent, while IMC gives NACG exposure across iron ore, gold and critical minerals in another major minerals jurisdiction, broadening from its current Australian focus on coal and its Canadian presence in oil sands.
Australian Securities and Investments Commission records show the pair own a third each of DCL Corp which owns Iron Mine Services, the company behind the IMC business.
The other third is held by Stoneridge Mining, a company largely owned by members of the Vinci family, with Leo Vinci the sole director.
Mr Keenan said IMC had started looking for ways to fund its growth ambitions but the approach from NACG had come before that process had really got underway.
He said the existing management would stay on to deliver on their strategy.
Mr Keenan said IMC would be looking at ways to use NACG's assets and balance sheet strength to support expansion plans.
"The market is asking for more," he said.
"We want to say yes."
With a major focus on iron ore, gold and, increasingly, lithium, IMC offers a significant geographic and commodity diversification for NACG.
IMC is currently in the process of developing a 2 hectare site at Muchea with eight bays capable of accommodating rebuilding work on the mine truck sizes up to 240 tonnes.
Listed on both the Toronto and New York stock exchanges, NACG said IMC had an order book exceeding $1.1 billion, including a recently awarded lithium mining contract with a three-year term, and a strong pipeline of large mining and civil projects.
Wesfarmers and SQM’s Covalent Lithium recently engaged IMC for more than three years’ worth of mining service work at the Mt Holland lithium mine near Southern Cross.
NACG highlighted the critical minerals opportunities in Western Australia in its presentation to investors regarding the deal.
IMC provides a full suite of services, including contract mining, crushing, civil and tailings services to a blue-chip customer base.
Its operations span key commodity sectors such as gold, iron ore and lithium backed by an established track record of safe and profitable operations.
The sale price was a 2.5 times multiple of the company’s earnings before interest, tax, depreciation and amortisation.
Subject to regulatory approval, IMC will boost North American’s existing presence in Australia, both in WA, where it has a business called Western Plant Hire, and on the east coast, where its major Australian assets MacKellar Group and DGI Trading are based.
Australia already represented 60 per cent of North American’s business and the acquisition will push that to 75 per cent, with the rest being mainly Canadian oil sands and US civil work.
National Bank Capital Markets acted as financial advisor to North American and Fasken Martineau DuMoulin LLP acted as Canadian legal advisor with MinterEllison as Australian legal advisor.
FTI was IMC's financial adviser and Thomson Geer was its lawyer.
