Under this restructure, the Sydney-based company’s vertical drilling operations will be run by McDermott. But AJ Lucas will continue to run the surface-to-inseam and underground operations.
Following the transfer, McDermott Drilling will manage 24 rigs, employing about 60 people. This operation is expected to generate about $18 million of revenue during the 2007 financial year.
AJ Lucas will pay $8 million in cash in shares over the next three years to acquire McDermott.
“The acquisition is expected to be earnings accretive in the first year, the quantum of which will be determined upon the preparation of the Lucas/McDermott business plan, which is currently underway,” the company said in a release to the Australian Stock Exchange.
McDermott achieved a $400,000 profit for the 2005-06 year on revenue worth $9.5 million.
“Lucas is pleased with its acquisition of McDermott’s and believes that the combination of the skills and resources of both companies will provide a comprehensive service to the coal and coal seam gas sectors,” AJ Lucas said.
