ORBIT GARANT ACQUIRES LANTECH DRILLING SERVICES
Transaction Adds 32 Rigs to Company’s Fleet and Provides
Strategic Entry Point to African Mineral Drilling Market
Val-d’Or, Quebec, Dec. 16, 2011 – Orbit Garant Drilling Inc. (TSX: OGD) (“Orbit Garant”) today announced that it has acquired Lantech Drilling Services Inc. (“Lantech Drilling”) for a purchase price of $12.0 million, consisting of $8.38 million in cash, the equivalent of $1.22 million in common shares of Orbit Garant at an issue price of $5.62 per share (based on the 30-day average closing listed price) and an earn-out portion of up to $2.4 million payable over three years based on targeted annual EBITDA performance, the whole subject to working capital adjustments. Orbit Garant expects the transaction to be accretive to earnings per share in the initial 12-month period after closing.
“The acquisition of Lantech Drilling significantly strengthens our competitive position and platform for future growth,” said Eric Alexandre, President and CEO of Orbit Garant. “Through the transaction, we have established a new strategic hub for Orbit Garant in Eastern Canada, added 32 drill rigs to our fleet, and strengthened our team with highly skilled management personnel, drillers and field technicians. Lantech Drilling also provides Orbit Garant with a strategic entry point to the higher margin mineral drilling market in West Africa. We plan on leveraging Lantech Drilling’s established base of mineral drilling and geotechnical services operations in West Africa to pursue business development opportunities in both West and South Africa.”
“Further, the acquisition brings us expertise in iron ore drilling and geotechnical services that we did not have previously, thereby enhancing our service offering for customers,” added Mr. Alexandre. “Backed by the resources of Orbit Garant, we believe Lantech Drilling will be well positioned to accelerate its growth in the current market environment. We warmly welcome management and employees from Lantech Drilling to the Orbit Garant team and look forward to building value for our stakeholders.”
From its head office in Dieppe, New Brunswick, and branch office in Newmarket, Ontario, Lantech Drilling offers specialized exploration and geotechnical services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies. Lantech Drilling has 32 multi-purpose and diamond core drill rigs and employs 141 people. Approximately 70% of Lantech Drilling’s fleet capacity has been booked for 2012. For the 12 months ended September 30, 2011, the Company generated $22.3 million in revenue.
Founded in 1990, Lantech Drilling has worked with mining industry majors, including Noranda / Falconbridge (now Xstrata) in Canada and ArcelorMittal in West Africa. Lantech Drilling’s exploration services consist of exploration drilling, orientation equipment, trenching, and heavy equipment rentals. Lantech Drilling’s mineral exploration project sites are currently located in eastern Canada and Nunavut, as well as Liberia and Mauritania in West Africa. Lantech Drilling’s mining and mineral exploration services operations in Canada and West Africa generated approximately 66% and 9%, respectively, of its consolidated revenue for the 12 months ended September 30, 2011. Approximately 70% of Lantech Drilling’s mining industry revenue is derived from senior or intermediate companies.
Lantech Drilling’s geotechnical drilling services are effective at assessing soil or rock formations to interpret site geology and structural conditions on a site in preparation for construction of infrastructure such as bridges, roads, and buildings. Lantech Drilling’s geotechnical services can also determine the sources and extent of underground contamination for environmental assessments. Lantech Drilling’s geotechnical services operations in Canada and West Africa generated approximately 16% and 9%, respectively, of its consolidated revenue for the 12 months ended September 30, 2011.
“Orbit Garant is one of Canada’s leading mineral drilling companies and we welcome this opportunity to join forces with them to create an even stronger combined company. Our company cultures are a good fit, especially our shared focus on providing exceptional service to customers and building long-term industry relationships,” said Jean LeBlanc, Founder, President and CEO of Lantech Drilling Services Inc. “Through this transaction, Lantech Drilling will have access to greater resources and capital, which will position us to pursue more market opportunities going forward. We are excited to join the Orbit Garant team and look forward to being a part of Orbit Garant’s future growth.”
The Lantech Drilling management team, including Jean LeBlanc, Mark Williams, and Lise Dupuis, have entered into five-year employment contracts with Orbit Garant and will continue managing the operations of Lantech Drilling as a wholly owned subsidiary of Orbit Garant.
About Orbit Garant
Headquartered in Val-d’Or, Quebec, Orbit Garant is one of the largest Canadian-based drilling companies, providing both underground and surface drilling services in Canada and internationally through its 219 drills and more than 1,100 employees. Orbit Garant provides services to major, intermediate and junior mining companies, through each stage of mining exploration, development and production. The Company also provides geotechnical drilling services to mining or mineral exploration companies, engineering and environmental consultant firms, and government agencies. For more information please visit the Company’s website at www.orbitgarant.com.
Forward-looking information
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to business of Orbit Garant Drilling Inc. (the “Company”) and the environment in which it operates. Forward-looking statements are identified by words such as “believe”, “anticipate”, “expect”, “intend”, “plan”, “will”, “may” and other similar expressions. These statements are based on the Company’s expectations, estimates, forecasts and projections. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. These risks and uncertainties are discussed in the Company’s regulatory filings available at www.sedar.com . There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances.
For further information:
| Alain Laplante Vice President and Chief Financial Officer (819) 824-2707 Ext. 122 | Bruce Wigle Investor Relations (416) 447-4740 Ext. 232 |