DDH1 Limited (ASX:DDH) reached a non-bonding agreement to acquire Drilling business of Swick Mining Services Limited (ASX:SWK) for AUD 97.7 million on October 12, 2021. Under a Scheme of Arrangement Swick shareholders are to receive 0.2970 new DDH1 shares for each Swick share held. In addition, Swick shareholders will also receive Orexplore shares. DDH1 expects to issue approximately 84.2 million new DDH1 shares upon completion. Upon completion of the Proposed Transaction, Swick shareholders will own approximately 19.7% of the combined business. Proposed transaction values Swick Drilling Business at an enterprise value of AUD 115 million – 3.8x FY21 Drilling Business EBITDA and 6.7x FY21 Drilling Business Pro-Forma EBIT. Swick Drilling business reported EBITDA of AUD 30.4 million and EBIT of AUD 17.2 million for the financial year ended June 30, 2021. The Proposed Transaction is conditional on, among other things, negotiation of a binding Scheme Implementation Agreement between the parties, which is expected to occur shortly. Transaction is subject to various matters, including Finalizing and executing of a Scheme Implementation Agreement, for approval by DDH1 and Swick Boards, Securing regulatory approvals for the Proposed Transaction, Swick shareholder approval, Court approval and meeting other customary conditions; and Foreign Investment Review Board (FIRB) approval. Subject to entry into the Scheme Implementation Agreement, the Board of Swick intends to unanimously recommend the Proposed Transaction to shareholders (subject to no superior proposal and the independent expert recommending the Proposed Transaction).

The transaction is expected to occur following completion of the Orexplore demerger by Swick. The Proposed Transaction is expected to be approximately 10% - 15% earnings accretive based on DDH1 and Swick's FY21 performance and conservative synergies being achieved. Moelis Australia Securities Pty Ltd. acted as financial advisor and Clayton Utz acted as legal advisor to DDH1 Limited. Shaw and Partners Limited acted as financial advisor and HWL Ebsworth Lawyers Pty Ltd. acted as legal advisor to Swick Mining Services Limited. Jamie Litchen, Jonathan Sherman, James Lyle and Stacey Weltman of Cassels acted as legal advisor to DDH1. On 17, January 2022, Swick Mining Services Limited approved transaction. As on February, 7, 2022, Swick are pleased to announce that Swick has today lodged with the Australian Securities and Investment Commission (ASIC) a copy of the orders of the Supreme Court of Western Australia (Orders) approving the scheme of arrangement pursuant to which DDH1, through its wholly owned subsidiary DDH1 FinCo Pty Ltd, will acquire all of the shares in Swick. The Scheme is expected to be implemented on 16 February 2022, and on implementation, all eligible Swick shareholders will receive 0.2970 new DDH1 shares for each Swick share held on the Record Date of 9 February 2022.