Boart Longyear has been Acquired and Taken Private Following a Convoluted Multiyear Journey that Eventually Valued the Firm at $383 Million

From a 2007 IPO on the Australian Stock Exchange that valued Boart Longyear at over $1.5 billion, this month's acquisition occurred at a price of under $385 million.

Boart Longyear has been Acquired and Taken Private Following a Convoluted Multiyear Journey that Eventually Valued the Firm at $383 Million
Boart Longyear's StopeMate underground drilling system; image downloaded from the company website 26 April 2024.

Following a 134-year journey that saw it become a publicly traded firm in 2007, Boart Longyear is now fully owned by a private equity firm with over $16 billion in assets under management.

In an agreement originally announced in December 2023, Salt Lake City-based Boart Longyear has now been acquired in a "Take Private" deal by New York City-based American Industrial Partners via its Capital Fund VIII that saw Boart eventually valued at $383 million.

In contrast, when the firm went public on the Australian Stock Exchange in June 2007, it did so at a market capitalization of over A$2.35 billion (valued at $1.54 billion in U.S. dollars).

According to Boart Longyear's MANAGEMENT INFORMATION CIRCULAR published with the Australian Stock Exchange on 29 January 2024, the five largest Boart Longyear shareholders received between $1.2009 and $1.2351 in cash per share via the recent acquisition, with minority shareholders receiving $1.9554/share in cash for their shares.

In its news release announcing the completion of the acquisition, the transaction officially closed on 11 April 2024.

The Back Story of Boart Longyear's "Take Private" Acquisition

Formed in 1890, Boart Longyear is the world's leading provider of drilling services, drilling equipment and performance tooling for mining and drilling companies, and it has operations in

  • North, Central, and South America,
  • Europe,
  • Africa, and
  • Australia.
Photo showcasing part of Boart Longyear's LX™ 11 Multipurpose Drill; photo downloaded from the firm's website 26 April 2024.

As noted above, the firm went public on the Australian Stock Exchange in 2007 (under the symbol BLY), and at its Initial Public Offering, Boart was valued at over A$2.35 billion.

According to Boart Longyear's MANAGEMENT INFORMATION CIRCULAR (referenced above), the company recognized in May 2021 that its significant debt load would need to be recapitalized in 2022 for the company to successfully proceed forward.

Thus began what became a more than 2.5-year complex, multifaceted approach on how to best resolve this recapitalization need, as well as the best valuation options for its shareholders, with various meetings and consultations held over a 37-month-long-period with/between/among its

  • Lenders,
  • Investment banker (Goldman Sachs),
  • Secured and unsecured creditors,
  • Australian and Canadian law firms, respectively, and its
  • Five largest shareholders (representing eventually 98.86% of the outstanding shares of Boart Longyear),
  • Board of directors, and
  • Two unnamed prospective corporate suitors, as well as
  • The eventual acquirer, American Industrial Partners.

Through this more than 950-day process, Boart Longyear considered and completed a recapitalization that saw its debt slashed to under $200 million in September 2021 by converting approximately $795 million of debt into a 98.5% ownership stake of its post-recapitalization common shares for its prior debtors.

Concurrently, a new parent company (Boart Longyear Group Ltd.) was formed and domiciled in Ontario, Canada as the new "top-tier parent company of the Boart Longyear Group which assumed the existing ASX listing."

{NOTE: It appears that Boart Longyear's United States operations continued to be headquartered in Salt Lake City, Utah.}

Then, beginning in February 2022, the board turned again to Goldman Sachs to solicit its assistance in considering and presenting to it

"... potential strategic alternatives to maximize value for (Boart Longyear) shareholders."

Goldman's recommendations included options ranging from

  • Raising new capital through an equity sale via a public stock offering on the Toronto Stock Exchange, and/or
  • Potential mergers / acquisitions, including selling off all or part of Boart Longyear.

By June 2022, the Mergers and Acquisitions route was seen by the Boart Longyear board as the most optimal approach, with three prime candidates eventually emerging as the most likely acquirers.

However, the emergence of these three potential acquirers was, in reality, only the initial stage of what (to this journalist) was a seriously convoluted and protracted journey at best, with the acquiring victor — American Industrial Partners — only burbling to the top of the heap in December 2023 some 18+ months later.

What's Next?

That said, the shares of Boart Longyear have now been purchased by American Industrial Partners and the acquisition is completed.

For its part, AIP (Boart Longyear's new owner), is a 37-year-old, New York City-headquartered private equity group with over $16 billion in assets under management (AUM) and 45 companies currently part of its portfolio.

Hence, if the future route of American Industrial Partners holds true to that of other PEGs, look for AIP to maintain its ownership of Boart Longyear for 5-to-7 years while it looks to streamline its operations and profit-generating capabilities prior to its own exit from the firm, either via a public offering or the sale to another entity.


This article was originally published and distributed to our Subscribers on 01 May 2024.

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