Swedish engineering group Sandvik has agreed to sell its exploration business to Drillman, a subsidiary of the M Group of companies.

Sandvik will divest exploration rigs, consumables and production stock. The agreement also includes certain trademarks and patents.

Sandvik president and CEO Stefan Widing said: “I am pleased that we have signed an agreement to sell our exploration business as this is in line with our focus to further improve the efficiency and profitability of our company.”

Drillman is a provider of equipment and technical support to the geotechnical, mineral exploration, as well as upstream gas drilling sectors.

The two parties did not disclose the value of the deal.

Sandvik Mining and Rock Technology president Henrik Ager said: “I believe we have found a good home for our exploration business in Drillman, who will support in the further development of its operations and performance.”

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According to Sandvik, the exploration business will continue to be consolidated in the financial statements of Sandvik Mining and Rock Technology until the transaction is completed.

M Group of Companies CEO Harry Mostert said: “We are very excited to acquire Sandvik’s Exploration business and look forward to collaborating throughout the transition.

“The acquisition forms part of our long-term strategy to expand our international footprint and we are eager to introduce our passion for the mining and exploration business into the global market.”

Expected to close in the fourth quarter this year, the transaction is dependent on receiving approvals from respective regulatory authorities.

Last year, Sandvik’s exploration business reported about SEK450m ($51m) in revenues. It also had a margin ‘slightly dilutive’ to Sandvik Mining and Rock Technology.

In May, Sandvik said it is continuing its sustainability drive, with the trialling of its first Stage V compliant underground truck at the Boliden-owned Tara zinc mine in Ireland.