The purchase price for the acquisition is valued at an amount up to CA$19.7 million (US$14.8 million), which will consist of: a cash payment of CA$15.2 million payable on closing of the transaction, subject to working capital adjustments; CA $2.0 million paid by the issuance of common shares of Major Drilling, valued on the closing of the transaction (subject to TSX approval); and an earn out of CA$2.5 million payable in cash following the third anniversary of closing.
"We are very excited to welcome Norex and its 120 employees into the Major Drilling group. Norex has been operating successfully in the Ontario marketplace for some 40 years and has a solid reputation with its clients.
"The acquisition of Norex is a unique opportunity for Major Drilling to gain a strong position to service our customers in both surface and underground exploration drilling services in the prolific North-eastern Ontario region. The culture and operational values of both companies are very similar in terms of personnel and strategies, and this will allow us to provide our customers with expanded drilling services," said Denis Larocque, president and CEO of Major Drilling.
Major Drilling is retaining the management team, gaining access to skilled and experienced drillers and personnel and is taking over existing contracts.
Through this purchase, Major Drilling will also acquire an additional 22 drill rigs, including 17 compatible specialised surface drill rigs and five underground drills, together with related support equipment and inventory.