DSI Underground to become part of Sandvik 31 Dec 2020

Current owner of DSI Underground, Triton, and Sandvik have signed an acquisition agreement Sandvik has signed an agreement with Triton to acquire its DSI Underground business. The acquisition by Sandvik will add the DSI Underground ground support and reinforcement products, sales footprint and 22 local production facilities worldwide to the Sandvik Mining and Rock Solutions business area. The acquisition will combine the DSI Underground resources, expertise, and market reach, and its brands, from bolting systems to injection chemicals and resin capsules, with the Sandvik range of rock drilling, loading and hauling equipment, tools and support services, to create the widest range of products and services to the international mining and tunnelling industries. Subject to regulatory approvals, the transaction of ownership is expected to close by mid-2021.

Triton initiated a sales process at the beginning of 2020 and there were various interested parties from the private equity side as well as from industry companies. The negotiated purchase price with Sandvik is €943 million on a cash and debt free basis. In 2020, DSI Underground had 2,000 engineers and technical specialists operating in 70 countries and has expected revenues of about €518 million, excluding four DSI Underground joint ventures that are also part of the acquisition. These include agreements concluded in 2016 with Jenmar for joint operations in different market areas of the world.

In 2019 the publicly listed Sandvik Group, based in Sweden, had about 40,000 employees operating in more than 160 countries, and recorded revenues for 2019 of about SEK 100 billion (€100 billion).

“This acquisition is an important step in our growth ambition,” said Stefan Widing, President and CEO of Sandvik. “The DSI Underground track record of driving progress and safety in underground operations and its global reach will further strengthen our global market position.” Henrik Ager, President of Sandvik Mining and Rock Solutions, said, “the DSI Underground offering is complementary with our range of products and its global service and sales network will strengthen our aftermarket business and leadership in underground operations. The acquisition also gives DSI Underground access to the Sandvik R&D resources.”

In his response, Michael Reich, CEO of DSI Underground, said, “we are delighted to have found in Sandvik Group a strong and visionary partner who supports DSI Underground in our already initiated path. This is an exciting time and the inclusion of DSI Underground to the Sandvik Mining and Rock Solutions business area brings many new capabilities and opportunities.” After 16 years of private equity ownership, DSI Underground once again has an industrial owner that shares similar values, thinking and behaviour.

In his statement Reich recognised Triton for its efforts and support. Triton, a European private equity house, acquired DYWIDAG-Systems International (DSI) from previous owners BAML (Bank of America Merrill Lynch) and Barclays Capital, which had taken over DSI in 2010 from CVC Capital Partners.

Reich said: “Triton had invested and supported DSI Underground in developing significant value-added measures, including by streamlining our processes, by taking measures to increase sales, by successfully realigning our product development and by accelerating digitization and supporting our ESG, environmental, social, and corporate governance, initiatives. Now, we are opening a new chapter. We believe that we have a strong new industrial home in Sandvik, with good growth opportunities and strong product and geographic synergies. The Sandvik strategy is to invest in strong businesses with good growth potential. DSI Underground fits well with Sandvik Mining and Rock Solutions. With our knowledge of ground support technologies, we can add a valuable and complementary offering to Sandvik Mining and Rock Solutions. On the other hand, we will benefit from the knowledge of the new group and the Sandvik global customer network. Our customers will continue to receive the products and services at the same high quality with the associated service. At the same time, we will be able to expand our global reach and combine our offering with Sandvik products and services for the benefit of our customers. My colleagues at DSI Underground are looking very much forward to becoming part of Sandvik.”