Some of the excerption from one of the mail I got:
Another great growth story largely ignored by the Toronto analysts, Major
Drilling is strengthening after its announcement last Friday of a major
acquisition. This acquisition "provides Major Drilling with access to
opportunities in western Canada, while at the same time complimenting Major
Drilling's international expansion strategy". MDI announced it has entered
into an agreement to purchase 100% of the mineral exploration drilling
business of J.T. Thomas Diamond Drilling (1980) Ltd., J.T. Thomas Diamond
Drilling Ltd., J.T. Thomas Canadian Drilling
Ltd., J.T. Thomas de Mexico S.A. de C.V. and J.T. Thomas Perforaciones
Canadienses Limitada. "These companies (all of which are here referred to
as J.T. Thomas or the Company), currently conduct mineral exploration
drilling in British Columbia, the Yukon, the Northwest Territories, Mexico
and Costa Rica. The purchase is effective May 1, 1997 and will be concluded
on or before May 21, 1997 through a combined purchase by Major Drilling of
shares and assets."
This new acquisition will add to MDI's impressive revenue/earnings
performance of the past several years (going back before Major was publicly
listed in the spring of 1995, shortly before being featured in BBS). J.T.
Thomas has been growing also and looks like a good fit for MDI's highly
aggressive management. "Revenues from drilling operations for J.T. Thomas
for the fiscal years ended April 30, 1995 and 1996, as well as for the ten
month period ended February 28, 1997 were $13.3M, $15.9M and $22.2M
respectively. Earnings from drilling operations before taxes and owner
bonuses for these years were $2.9M, $4.0M and $8.7M respectively. Earnings
for 1997 will be subject to normal year and accounting adjustments. This
information is based on the unaudited financial statements of the Company
for these periods. The purchase price for the transaction is $13,500,000
dollars, subject to adjustments, consisting of a combination of
approximately $11,500,000 in cash and $2,000,000 in common shares in Major
Drilling at a price of $13.50 per share. The cash portion will be funded
from Major Drilling's currently existing working capital."
As with many of MDI's acquisition, J.T. brings additional non-tangible
assets including "an excellent reputation for quality in the industry".
MDI, which has grown both by expanding its own resources and through
strategic acquisitions always tries to retain key personnel ;"the Company
(J.T.) will continue to operate as an individual entity under the direct
management of Mr. John Baker, who has been with the company for
approximately seventeen years." |
