The deal is subject to certain conditions precedent being met and is expected to be completed within the next three months.
Coffey will pay approximately A$8 million in a combination of cash and shares and expects the transaction to be earnings per share accretive.
Geoexplore’s annual revenue is approximately A$10 million.
Coffey International Limited managing director Roger Olds said that entry into the South American market was part of the Coffey group’s strategy to become a leading global multi-specialist business.
“Geoexplore will merge with Coffey Mining, as part of its strategy to build a global footprint and expand its client base.
“Brazil is arguably Latin America’s strongest economy and mining is a big part of this economy. Coffey has been working in this market and with Geoexplore in particular. There is great cultural fit despite the differences in language.,” Roger said.
Entry into a resource-rich, rapidly emerging market
Coffey Mining chief executive officer Dan O’Toole said the entry into the Brazilian mining service market provided twofold growth opportunities.
“With an in-country presence we will be able to provide better support to our Australian and Canadian clients who are already active in this market, and foster strong, long-term relationships with Brazilian companies who are rapidly expanding outside Brazil.”
Geoexplore is Brazil’s peak consulting body in exploration project management services. It also provides specialist consulting in resource modelling and mine planning, and geoinformatics, including software development, as the GeoExplo Enterprise. The company has more than 350 permanent staff.
Geoexplore’s key clients include CVRD, the world’s biggest iron ore miner, which bought Australian company AMCI earlier this year, Votorantim Group, one of Brazil’s largest private companies, which began its internationalisation process in 2001, and BHP Billiton, among other important Brazilian companies.
Investment in the Brazilian mining and metallurgy industry is estimated to be worth almost A$51 billion by 2010. It is a resource-rich country geographically slightly larger than Australia and has been earmarked as one of four emerging economic power-houses in the world, along with Russia, India and China (the so called BRIC countries).
“The Brazilian economy is substantial, yet still relatively immature. Geoexplore’s excellent reputation in Brazil positions us as market leaders just as Brazil begins to realise the potential of its exploration and mining sectors.
“The completion of this acquisition is a key step on the journey to provide global on-the-ground service to clients. Coffey Mining already has significant presence in Australian, South Africa, Ghana, and Senegal, and we recently opened our first office in Zambia. We are also looking to expand our presence into the Portuguese-speaking Africa with the addition of Geoexplore staff,” Dan said.
Excellent cultural and technical fit
Geoexplore was founded in 1994 by Mario Conrado Reinhardt and Vicente de Paulo Pereira. Both will continue their roles within Geoexplore, with Vicente assuming the title of Regional Manger, Brazil and Mario taking the role of Technical Manager, Brazil.
Vicente said that merger was an ideal fit for Geoexplore’s capabilities and staff.
“The merger with Coffey Mining will provide for our Brazilian clients support for international projects in Africa, South America and Australia and for our staff the opportunity to gain world-wide experience, and greater exposure to more disciplines within mining consulting. It gives our company the opportunity to grow our capability worldwide.
“Our company culture and strategic plans are a neat fit with those of Coffey Mining. And our technical capabilities within exploration project management and resource modelling are complementary to Coffey Mining’s core areas of geotechnical engineering, hydrogeology, metallurgy, tailings, environmental capabilities and resource management.
“Furthermore, our experience in tailored software development will enhance Coffey Mining’s ability to provide specialist knowledge to clients from the board room to the mine face,” Vicente said.
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About Coffey
Coffey International Limited aspires to improve the lives of world communities by providing physical and social infrastructure solutions to business, government and development assistance agencies.
Coffey has a market capitalisation of approximately A$400 million. It employs approximately 2,500 people. Coffey has approximately 50 offices in Australia, with permanent offices in the UAE, Indonesia, Vietnam, Papua New Guinea, the USA, the Philippines, South Africa, Ghana, Zambia, United Kingdom and New Zealand, and project offices spread throughout the world.
Coffey International Limited is listed on the Australian Stock Exchange and is part of the S&P ASX 300 and small companies’ indices.
Visit www.coffey.com for more information.
About Geoexplore Consultoria e Serviços Ltda
Geoexplore Consultoria e Serviços Ltda was founded in 1994 by Mario Conrado Reinhardt and Vicente de Paulo Pereira. It is Brazil’s peak consulting body in exploration project management services. It also provides specialist consulting in resource modelling and mine planning, and geoinformatics, including software development. The company has more than 350 permanent staff, and has headquarters in Belo Horizonte, with an additional four branch offices and ten field offices.
Visit www.geoexplore.com.br for more information.
Note to editors:
Roger Olds is available for interview. To arrange an interview or for further information, please contact:
Josephine Marriage at Mendleson Communication on (+61) (3) 9827 0422, 0408 366 378, josephine@mendleson.co.au
or
Diana Krause, Communications Manager, Coffey International Limited, on (+61) (3) 9473 1405, 0420 959 942, diana_krause@coffey.com
