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Wednesday, January 19, 2022

Sandvik to acquire leading mine planning software giant, Deswik and launch new Digital Mining Technologies division.

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Samson
Samson is the Editor in Chief of The Mining Executive and The Engineering Executive.
I Mergers & Acquisitions I

“Deswik’s second to none software suite combined with Sandvik’s digital and automation offering creates a clear world leader in digital solutions for the mining industry. Combining Deswik’s skills in mine planning and scheduling with our equipment and automation expertise will open new opportunities for optimizing our customers’ mining value chain.”

Henrik Ager,
President,
Sandvik Mining and Rock Solutions.

Sandvik has signed an agreement to acquire Australian-based Deswik, the leading and fastest growing major provider of mine planning software. Deswik will be part of a newly formed division Digital Mining Technologies within business area Sandvik Mining and Rock Solutions.

Sandvik has signed an agreement to acquire Australian-based Deswik, the leading and fastest growing major provider of mine planning software. Deswik will be part of a newly formed division Digital Mining Technologies within business area Sandvik Mining and Rock Solutions.

By acquiring Deswik, Sandvik gains a top-tier supplier of integrated software platforms that support digitalization throughout mine planning stages, with more than 10,000 current licenses. Deswik has a high quality customer base, and its strong profitable growth and low customer churn will further enhance Sandvik’s presence within software and digitalization, and help accelerate growth.

“I am very pleased that we continue to execute on our shift to growth strategy, and continue to broaden our offering with digital solutions that increase productivity in the customer’s value chain. Mine planning and operations management is a key growth opportunity, and this complementary acquisition and our new Digital Mining Technologies Division will strengthen our digital offering and enable us to provide customers a more comprehensive suite of technologies,” says Stefan Widing, President and CEO of Sandvik.

Deswik will fill a value chain gap in Sandvik Mining and Rock Solutions’ offering, increasing upstream mining coverage and enabling opportunities for end-to-end optimization solutions, including, for example, incorporating electrification at the mine planning stage. Its core software suite includes computer-aided 3D mine design, scheduling, operations planning, mining data management and geological mapping. Deswik also offers a range of consultancy services, including mine planning, scoping, software implementation and training support.

“Deswik’s second to none software suite combined with Sandvik’s digital and automation offering creates a clear world leader in digital solutions for the mining industry. Combining Deswik’s skills in mine planning and scheduling with our equipment and automation expertise will open new opportunities for optimizing our customers’ mining value chain” says Henrik Ager, President of Sandvik Mining and Rock Solutions.

Deswik will form one of three cornerstones in the newly-created division Digital Mining Technologies, established to accelerate the execution of Sandvik Mining and Rock Solutions’ strategic priority to lead the industry development of underground sustainability and productivity solutions in electrification, automation, digitalization and end-to-end optimization. The new division also includes Sandvik Mining and Rock Solutions automation solutions and the Newtrax telemetry and collision avoidance solutions.

Privately-owned Deswik, established in 2008 and headquartered in Brisbane, has approximately 300 employees and operates 14 offices in 10 countries. The company has demonstrated strong and profitable growth over the past decade in the large and growing mining software market.

Deswik’s revenue per October 2021, on a rolling twelve month basis, totaled AUD 79 million, of which the share of recurring revenue was approximately 45 percent, and with an EBITA margin of approximately 30 percent. Impact on earnings per share (excluding non-cash amortization effects from business combinations) will be accretive. The parties have agreed not to disclose the purchase price.

The transaction is expected to close during Q1 2022, subject to relevant regulatory approvals.

Sandvik estimates that transaction costs of approximately SEK 50 million in total will impact Sandvik Mining and Rock Solutions in the fourth quarter.

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