Sandvik is set to acquire a global underground safety solutions provider DSI Underground for €943 million ($1.5 billion).
DSI, which is owned by global investment firm Triton, is an employer of around 2000 employees in 70 countries including Australia.
The company provides ground support and strata reinforcement products and systems such as bolting systems and injection chemicals.
The acquisition will give Sandvik more than 20 additional local production facilities on all continents, with DSI set to come under Sandvik Mining and Rock Solutions.
Sandvik chief executive and president Stefan Widing said the acquisition was an important step in its growth ambition.
“DSI Underground’s track record of driving progress and safety in underground operations and its global reach will further strengthen our world-leading market position within mining and rock solutions,” he said.
Sandvik Mining and Rock Solutions president Henrik Ager added: “With the world’s most extensive choice of ground support products and systems, the DSI Underground’s offering is highly complementary and enables us to deliver greater value and safety to our customers.
“The deal gives DSI Underground access to Sandvik’s substantial research and development (R&D), global service and sales network, complements our growing aftermarket business and strengthens our leadership in underground mining and tunnelling.”
Sandvik expects DSI’s revenue for 2020 to be about €518 million, with an earnings margin that will be dilutive to that of Sandvik Mining and Rock Solutions.
DSI chief executive Michael Reich said the company is opening a new chapter and that it has a strong new industrial home in Sandvik.
“Sandvik’s strategy is to invest in strong businesses with good growth potential. DSI Underground fits very well with Sandvik Mining and Rock Solutions,” he said.
“With our knowledge of ground support technologies, we can add a valuable and complementary offering to Sandvik Mining and Rock Solutions.”
The acquisition is subject to regulatory approvals and expected to close by mid-2021.