SDS’ board has unanimously recommended the offer of $A1.14 in cash for each SDS share, in the absence of a higher bid. The figure is a significant premium to the trading price over recent months.

SDS managing director Fred Moir said the offer by Sandvik to acquire SDS was an exceptional opportunity for both the company and its shareholders.

“We believe this is an attractive offer for shareholders of SDS and represents excellent value for our growing company,” he said.

“Sandvik is a progressive global company and this agreement provides exciting growth prospects for our business, employees and shareholders. The board at SDS therefore urges our shareholders to accept this offer subject to there being no superior proposal.”

Moir said the acquisition by Sandvik Mining and Construction Australia – a wholly owned subsidiary of Sandvik – represented the successful conclusion to SDS’ seven-month search for a suitable business partner to take the company to the next stage of its development.

With its head office in South Australia, SDS is an international player in the design and manufacture of drilling equipment for resources exploration.

“We have been looking for a strategic partner with the resources and global presence required to take our company to the next level – we believe we have found that partner in Sandvik,” Moir said.

“This will enable us to boost SDS’ own strong market position by enhancing our ability to grow globally.”

Moir said SDS staff, expertise, products and services would remain an integral component of Sandvik’s future vision for the company.

SDS’ largest shareholder, F Moir Investments, which holds a 37.61% stake, has agreed to sell to Sandvik a 10% stake in SDS in certain circumstances, and further indicated that it intends to accept the offer in respect of its remaining holding, in the absence of a superior offer. Moir is the sole shareholder of F Moir Investments.