As a global leader and the only integrated participant in the global drilling services and products industry, Boart Longyear has the access to capital and industry knowledge to lead the consolidation of the market.
The Company has a track record of successfully integrating acquisitions. Once businesses are acquired, Boart Longyear implements a targeted integration strategy focussing on management capabilities and operational effi ciencies of the business. In the case of the acquisitions the Company has made in the six months to January 2007, the Company will seek to retain key management of the acquired business and selectively recruit to fi ll any gaps in the management team. Boart Longyear will then implement standardised management tools and processes in corporate functions such as human resources, accounting, forecasting and budgeting, environment and occupational health and safety.
Most significantly, as many acquired companies are relatively small and capital constrained, Boart Longyear will typically inject capital into acquired businesses to fund growth. For example:
- Boart Longyear acquired Lang Exploratory
Drilling in the early 1980s. Through capital
investment, the Lang business has grown
from US$3 million annual revenue to over
US$100 million per annum in revenue while
diversifying into water and energy drilling
services; and
- the Company has made significant
investment in environmental drilling services
in recent years, by acquiring Wisconsin
Test Drilling, Northstar Drilling, D.L. Maher,
Geotech Explorations Inc, and Holt Drilling
in the United States. Through a program
of capital investment that included adding
rigs and other ancillary equipment to these
businesses, Boart Longyear has succeeded
in establishing a leading position in the
United States environmental drilling sector.
Boart Longyear has been and will continue pursuing its acquisition strategy on a global basis. The choice of future acquisition targets will be driven by targets of strategic interest that provide a quicker and more profitable route to new markets, new customers or new technology than might be possible through a strictly organic strategy. The Company will focus on acquisitions in developing countries such as Russia, Latin America and parts of Africa and the Environmental & Infrastructure and Energy Industries.
