Formation of Australian Drilling Solutions

On 30 May 2008 completed the acquisition of 3 drilling services businesses including Gorey & Cole, Sides and Nudrill (together Australian Drilling Solutions "ADS") from each of the founding shareholders.  ADS followed up with 2 additional bolt-on acquisitions in the form of Colby and Peak, both based in Western Australia.  Ironbridge maintains a controlling interest in ADS with the balance owned by founding shareholders and a newly appointed senior management team.

The businesses currently provide drilling services to a number of sectors including minerals/resources, infrastructure, construction and oil & gas with all sectors continuing to experience solid growth in the Australian market. This is expected to continue over the long-term driven by Australia's unique position as one of the closest resource based trading partners for the emerging Asian economies and due to the expected increase in government spending on infrastructure projects.

is adopting a "buy and build" strategy in relation to the investment and has negotiated a $50m acquisition and capex facility in order to accelerate the growth of ADS. Expansion opportunities are being driven by the group's objective of establishing a drilling services business exposed to minerals, infrastructure and the oil & gas sectors providing the business with a number of avenues for growth.  To date the acquisitions have been focused on minerals and infrastructure with due diligence continuing in the energy sector.

The investment strategy will provide ADS with the capital to respond to the significant growth opportunities and the internal resources to allow the business to adopt best practice strategies in asset utilisation, OH&S and a more formalised training, development and succession plans for its employees.

To this end the founders were attracted to Ironbridge due to the demonstrable value add, particularly in relation to our past experience in the mining services sector and our background in growing private and family owned companies.  Ironbridge's portfolio team will assist with a "soft" corporatisation strategy and also assist in executing their acquisition strategies.

"The Australian mining services industry is undergoing significant growth driven by Australia's competitive advantage in most major commodities. We have adopted a buy and build strategy with an initial investment in 3 high quality, specialised and complementary businesses in order to create a large scale mining services operation"
Director, Josh McKean

Background & Business

ADS is the combination of 5 specialist drilling services businesses operating in the Australian market, including:

• Gorey & Cole – Founded in 1946 and sold to a senior employee Viv Oldfield in 1988. The business started as a water well drilling specialist offering services to the agricultural industry before it moved into the mining sector in 1990.  The business's background meant it was well suited to dewatering/water depressurization and backfill in mining operations due to the depth and diameter of the production holes required compared to exploration drilling. Since then it has secured long-term contracts with BHP-Billiton, ERA (subsidiary of Rio-Tinto) and Newmont. It continues to provide water well drilling services to the water authorities based in the Northern Territory as a preferred supplier;
• Nudrill – Founded by Mike Norburn in 1982 the business provides de-watering/water depressurisation services to major mining companies.  The business has been operating with Rio-Tinto in the Pilbara iron ore region for more than 25 years and is benefiting from significant growth in the iron ore market;
• Sides – Founded by the Sides family in 1923 the business provides a range of drilling services to mining, oil & gas and infrastructure clients.  Sides specialises in offshore/nearshore geo-technical drilling and operates 4 of the 10 transportable jack-up barges in the Australian market putting them in a strong competitive position;
• Colby Drilling – Founded by James Colby in 1986, the business is a water well driller specialising in de-watering services to the major mining companies.  The business also brings a dual rotary drilling capability to the group which is suited to regions such as the Pilbara;
• Peak – Founded by Richard Bennett in 2000, the business performs diamond and RC exploration work for a number of emerging Australian resource companies such as Atlas Iron and Hancock Resources to name a few. Although the team is young they are very experienced and are expected to take a leadership role in the business going forward.

The Values that drive our business are:

• Our People are passionate about drilling with an honest and practical approach.  They are knowledgeable and able to work remotely and do not take short cuts – we do it the right way!
• Customer Focus by doing what we say we will, using our long-term experience and unmatched understanding of the ground conditions we drill
• Quality & Innovation to provide an accurate representation of the hole contents or water displacement with speed and accuracy, and the capability to construct innovative engineering solutions that can offer lower cost
• Safety with the aim to be leaders in the industry and ensure everything we do meets the highest safety standards with safe production always