BDO advises McKay drilling in sale to Canada’s Major Drilling

BDO is proud to have acted as lead adviser to McKay Drilling who today announced it has entered into an agreement to sell 100% of the shares in the company to Canadian-based global drilling services company Major Drilling Group International Inc. (TSX:MDI) for a transaction value of up to $80 million. The sale is subject to customary closing conditions and is expected to close on or about June 1, 2021.

Founded in Kalgoorlie in 1990 and now headquartered in Wangara, McKay Drilling has grown to become one of Western Australia’s leading exploration and production drillers, with more than 200 staff, a fleet of high-calibre track- and truck-mounted drill rigs and longstanding partnerships with Tier 1 mining companies.

The buyer, Major Drilling, is one of the largest mining-focused drilling services companies in the world, with operations throughout Canada, the United States, Mexico, South America, Asia and Africa. The 100% acquisition of McKay Drilling represents a significant strategic step into the Australian market for Major and a beachhead for further growth in the Asia Pacific region.

“We are very excited to welcome McKay and its employees into the Major Drilling group,” said Denis Larocque, President & CEO of Major Drilling. “This acquisition is a meaningful part of our growth strategy and provides us a strong foothold in an important growth market with high barriers to entry. In addition to a fleet of state-of-the-art rigs, we are acquiring a highly-experienced team with local knowledge and longstanding relationships and existing contracts with leading blue chip mining companies.”

Cultural compatibility is a fundamental factor in a successful deal, with the expertise and approach of both drilling operators being a close match.

“This is a very exciting transaction,” said Mark McKay, founder and Managing Director of McKay Drilling. “Major Drilling is a great fit for McKay in terms of capabilities, values and culture. We both agree that a company is only as good as the people working within it, and I’m proud of the fantastic team we’ve built over the last three decades.”.

The McKay Drilling brand, management team and staff will all be retained going forward, with Major Drilling planning to invest in the company’s future growth and continued expansion, taking advantage of the robust Western Australian resources sector.

“I’m looking forward to seeing this team grow to new heights with the backing of Major Drilling,” said Mark McKay. “I would like to thank all of our staff for their hard work and dedication in helping to grow our business to where it is today, our clients for their continued support, and BDO Perth for their assistance throughout the sale process.”

The cross-border deal was facilitated by members of BDO’s Perth Mergers & Acquisitions team, including Cassie Adamini, Justin Boyce Cam and Todd Grover.

“It’s great to see an Australian market leader joining forces with the leading global company in the drilling space,” said Cassie Adamini. “With a strong cultural fit, the deal will have a positive impact on the Australian resources landscape. We’re seeing plenty of similar deals on the horizon with interest from both local and international buyers as WA commodities continue to strengthen.”