Diversified mining services company Ausdrill has closed the $197.2m transaction to acquire underground hard-rock mining contractor Barminco in order to strengthen its position.

Representing an enterprise value of $697m, the transaction was announced in August and enables Ausdrill to become the second largest mining services company in Australia, by revenue.

According to the deal, Ausdrill purchased all of the equity and equity-like instruments in Barminco by offering 150.7 million shares and $18.44m in cash.

Ausdrill managing director Mark Norwell said: “Barminco is a complementary business to Ausdrill, with a leading market position in underground hard-rock mining that establishes the company as a more diverse group with a broader service offering sought by our customers.

“By bringing the businesses together, our future growth opportunities are enhanced globally.”

“Not only is it a strategically and financially compelling deal, but there is also a good cultural fit with the two businesses having worked together in Africa through our African Underground Mining Services (AUMS) joint venture for over a decade now.

“Importantly, both companies are expecting earnings growth in FY19 and by bringing the businesses together, our future growth opportunities are enhanced globally.”

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Barminco shareholders now own 22.1% of the ordinary shares in Ausdrill.

Barminco recently signed contract extension agreements for mining projects in Western Australia, including a five-year A$700m ($503.43m) extension at AngloGold Ashanti’s Sunrise Dam, two four-year contracts at Gold Fields’ Agnew gold mine worth around A$335m ($238.55m).

The company was also awarded an A$240m ($169.95m) contract extension at Independence Group’s Nova nickel-copper-cobalt operation. The extension requires the company to deliver contract services at the mine for an additional four years.

Ausdrill and Barminco operate African Underground Mining Services (AUMS) in a 50:50 joint venture.