Global firm buys Perth’s Minnovare

Swedish company Hexagon has expanded its Western Australian presence with a second local acquisition, buying drilling technology business Minnovare in a deal potentially worth more than $100 million.

Founded by managing director Callum McCracken and director Michael Beilby in 2012, Minnovare has developed technology that improves the speed, cost and accuracy of underground drilling.

It has more than 150 contracted systems in about 90 mining operations worldwide, with customers including BHP, Northern Star Resources, Gold Fields and Evolution Mining.

Its technology is sold as a recurring revenue package, adding to the value of the business.

Hexagon did not disclose the purchase price but Business News understands it could be more than $100 million.

The final amount is dependent on Minnovare’s future earnings.

The sale provides a handsome exit for private equity investors Viburnum Funds and RCF Jolimont (linked to Resource Capital Funds), each of which bought a 30 per cent stake in 2016.

The balance was held by the founding directors and some of Minnovare’s staff, which in total number about 40.

Hexagon was advised on the deal by law firm K&L Gates while the vendors were advised by Norton Rose Fulbright and Gresham.

It’s the second big exit by Viburnum in the past year, following the sale of Kinetic Logging Services for about $150 million.

That transaction had striking parallels: the buyer was another Swedish multinational, Epiroc, and the attraction was smart technology developed in WA to improve mining efficiency.

The Minnovare deal also follows the sale of agtech leader Agworld for in excess of $100 million.

Once again, the sellers were private equity funds and the buyer was a big international company, Canada’s Semios, attracted by technology developed in WA.

Minnovare will become part of Hexagon’s mining division, led by Perth-based chief technology officer Rob Daw.

He joined Hexagon in 2017 when the global group bought his company, MiPlan.

“The integration of Minnovare’s innovative mining solutions will be invaluable for customers striving to improve the speed, cost and accuracy of underground drilling,” Mr Daw said.

“Today’s acquisition accelerates and enhances Hexagon’s underground development roadmap as well as strengthening our formidable drill and blast portfolio.”

Mr McCracken said he was excited to join the Hexagon group.

“Being part of Hexagon will provide Minnovare with established global channels and an engaged customer base, which will enable us to deliver our industry-leading technology and downstream benefits to mining companies across the world,” he said.

Hexagon president and chief executive Ola Rollén said his group saw opportunities for international expansion of Minnovare’s portfolio throughout Hexagon’s global footprint.

Minnovare’s original flagship product was the Azimuth Aligner, which used military technology to reduce the time and cost of setting up underground drill rigs.

Its current solution combines sensors, software and data analytics to eliminate manual, labour intensive processes in underground mining.

It delivers drill data faster and more accurately than before, improving the efficiency of underground drilling operations.

Editor’s note: The next print edition of Business News, out on Monday 17 January, will include new research ranking businesses in WA’s startup and tech sectors.