Ausdrill sells drilling tools business

Mining services business Ausdrill has sold one of its subsidiaries to a Finnish manufacturer for $66 million.

Ausdrill has sold Drilling Tools Australia to Robit Plc, a drilling products manufacturer with a customer base spanning 100 countries.

“The sale of DTA provides Ausdrill with the opportunity to crystallise considerable value on a portion of the group’s earnings, generating a profit after tax in the order of $35 million,” Ausdrill managing director Ron Sayers said.

“As Robit is a renowned manufacturer of quality drilling products with an extensive global distribution network, they will be able to service Ausdrill’s drill consumable needs into the future.”

Under the terms of the deal, DTA’s drill bit manufacturing and distribution business will be sold to Robit, while the subsidiary’s oil, gas and spare parts business will be retained by Ausdrill and transitioned to other divisions of the group.

DTA will continue manufacturing operations at its Canning Vale facility under a five-year leasing deal with Ausdrill, with the company also entering into a two-and-a-half year preferred supply arrangement with DTA for the supply of drill bits.

It follows news earlier this year that Ausdrill had sold its underperforming DT HiLoad truck tray manufacturing business to Schlam Engineering.

Ausdrill shares were 13 per cent higher to 47.5 cents each at 9:45am.