Sandvik to acquire DSI Underground for $1.15bn

Matthew Hall 4 January 2021 (Last Updated January 4th, 2021 17:04)

Swedish engineering group Sandvik has agreed to acquire DSI Underground, a company specialising in ground support and reinforcement products for the mining and tunnelling industries.

Sandvik has signed an agreement for the acquisition with DSI Underground’s owner Triton, a private equity investment firm, and will acquire 100% ownership of DSI Underground for a purchase price of €943m ($1.15bn) on a cash and debt-free basis. The deal remains subject to the relevant regulatory approvals but is expected to close in mid-2021. Once completed, DSI Underground will form part of Sandvik Mining and Rock Solutions.

Understanding the acquisition

DSI Underground and Sandvik Mining and Rock Solutions occupy similar spheres as providers of equipment, services, and solutions to the mining and tunnelling industries. DSI Underground is a global provider of ground support systems such as pumpable injection chemicals, resin capsules, galvanised mesh, and dynamic anchor systems for underground mining.

The two companies’ operations go hand-in-hand, and Sandvik’s view is that bringing DSI Underground under its umbrella will enhance the company’s customer offering. DSI Underground already operates in 70 countries and employs over 2,000 people; the acquisition adds 22 production facilities situated locally to end customers to Sandvik Mining and Rock Solutions’ portfolio.

Executives comment on the deal

“This acquisition is an important step in our growth ambition,” said Sandvik president and CEO Stefan Widing. “DSI Underground’s track record of driving progress and safety in underground operations and its global reach will further strengthen our world-leading position in mining and rock solutions.”

DSI Underground CEO Michael Reich welcomed Sandvik’s acquisition: “We believe that we have a strong new industrial home in Sandvik, with good growth opportunities and strong product and geographic synergies… DSI Underground fits very well with Sandvik Mining and Rock Solutions. With our knowledge of ground support technologies, we can add a valuable and complementary offering to Sandvik Mining and Rock Solutions. On the other hand, we will benefit from the knowledge of the new group and Sandvik’s global customer network.”

Sandvik Mining and Rock Solutions president Henrik Ager said: “With the world’s most extensive choice of ground support products and systems, DSI Underground’s offering is highly complementary and enables us to deliver greater value and safety to our customers. The deal gives DSI Underground access to Sandvik’s substantial R&D, global service and sales network, complements our growing aftermarket business, and strengthens our leadership in underground mining and tunnelling.”

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