DDH1 raises $150m through IPO

Local drilling business DDH1 is scheduled to list on the stock exchange next week after raising $150 million through its initial public offering.

Established in 2006, the Canning Vale business employs 930 people and operates a fleet of 96 drill rigs across its three brands, DDH1 Drilling, Ranger Drilling and Strike Drilling.

DDH1 this morning said demand from investors had significantly exceeded the number of shares available under its IPO (about 136.4 million), priced at $1.10 per share.

The business is scheduled to list on March 9.

Founders and directors Murray Pollock and Matt Thurston, which own the company alongside Oaktree Capital Management, will emerge with a combined 33.3 per cent stake.

DDH1 chair Diane Smith-Gander said the business looked forward to welcoming new shareholders.

“DDH1 is a successful, profitable and well-led company with a clear plan to capitalise on the continued growth in demand for specialised, high-quality drilling services in the mining and exploration industries across Australia,” she said.

“The funds raised through this IPO, together with existing cash, will be used to pay borrowings and enable existing shareholders to realise part of their investment, while the ASX will provide DDH1 with access to equity capital markets to pursue its growth strategy.”

The business, as outlined in its prospectus, has forecast full-year revenue of $280.2 million, underlying earnings of $69.3 million and net profit after tax of $30 million.

It is expected to hold a market capitalisation of $367.5 million upon listing.

The company's IPO is being led by Bell Potter Securities, Aitken Murray Capital Partners, Macquarie Capital, and UBS.