MINING SERVICES DIVERSIFIED

Written on the 4 March 2011

MINING SERVICES DIVERSIFIED

BRISBANE mining services firm Diversified Mining Services (DMS) has acquired two local businesses in the Hunter Valley which will further expand the company’s offering to the region’s vast mining industry.

The acquisition of scaffolding business Valley Scaffolding Services and protective coatings business Induspray Australia were bought for an undisclosed price.

The businesses are privately owned and managed by Peter and Julie Rogers and John Richardson. Both businesses are located in the Hunter Valley in New South Wales at Mt Thorley and employ around 80 staff.

The earnings accretive acquisitions will take DMS’ total annual revenue to more than $135 million and further enhances the geographic and operational diversity of the business ahead of a planned Initial Public Offer (IPO) in 2011.

DMS managing director Terry Young (pictured), says the new businesses will cement the company’s position in the Australian coal industry.

“These businesses are the ideal complement to our Mackay-based Scaffold & Rigging and Protective Coatings operations and give us deeper penetration into the Hunter Valley,” he says.

“The business’ vendors have agreed to remain with the business under our standard employment agreements and non-compete agreements and are committed to the continued growth and profitability of the business over the long term.”

Induspray performs abrasive blasting and painting and operates from two sites as well as performing minesite work throughout the Hunter Valley. Valley Scaffold meanwhile provides lease, erection and dismantling services for a variety of industries throughout the Hunter and Newcastle regions.

“They are both well respected and firmly established business which will further enhance the scope of services we are able to provide to the market,” he says.

“The Australian coal industry continues to ride an unprecedented period of growth and there are fantastic opportunities for any firm that can offer mining companies a comprehensive range of services.”

DMS will work with existing management to continue driving the growth of the business as it penetrates the Hunter Valley and New South Wales mining industry.

“These businesses have a strong, committed management team which have done an excellent job at building the companies into significant players in their respective sectors. I look forward to working with them and their staff as we consolidate their already strong market position,” says Young.

Young says it’s the ideal time to be expanding the company’s service offering as the sector remained highly fragmented and dominated by small to medium-sized companies which lacked the financial and management resources to seize the opportunities available in the sector.

DMS is an unlisted public company formed in May 2009 with the merger of five well respected and successful mining services businesses.

The merged businesses were Anderson Group of Companies (the Coaltram vehicle designers), Ausgroup Industries, Ausscaffold, East Coast Engineering, AllSteel Fabrications and MachineTek Engineering.


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