Boart Longyear to sell South African manufacturing operations

Global drilling contractor and manufacturer Boart Longyear is finally selling its South African manufacturing operations to Tranter Holdings for an unspecified sum.

LONDON - 

Boart Longyear is diversifying fully away from its South African roots (at least as far as the Boart part of the business is concerned) with the announcement that it is selling its South African manufacturing operations to Tranter Holdings.

Boart was originally founded as a subsidiary of South Africa's giant Anglo American Corporation, but since purchasing Longyear in the 1970s has gradually moved away from its southern African heritage and is now headquartered out of Salt Lake City in the U.S., although its corporate head office is in Sydney Australia and it is quoted on the ASX (Ticker: BLY)

The South African business, to be re-named Tranter Rock Drills, consists of Boart Longyear's percussive rock drills and hard rock tools product lines for Sub Saharan Africa as well as all manufacturing operations located in Roodepoort, South Africa. The business generated approximately $14 million in revenues in 2008. As a result of the sale, all 260 employees associated with the business are transferring to Tranter Rock Drills effective immediately.

Boart Longyear will continue to supply rock drills and hard rock tools outside of the Sub Saharan Africa region and under the terms of the sale Tranter Rock Drills will become Boart Longyear's exclusive supplier of rock drills for a two year period.

Craig Kipp, Boart Longyear's CEO, commented, "The sale of this part of our Sub Saharan Africa business is consistent with our on-going strategy to divest select non-core assets. We have also taken actions to transfer the manufacturing of several product lines to outsourced suppliers. As a result of this transaction, we are able to remain in the rock drill business outside of Africa with improved production flexibility and reduced fixed costs. This will allow us to supply high quality rock drills to our global customers."

Johannesburg will remain as the Sub-Saharan Africa regional sales headquarters for Boart Longyear along with its distribution point for the region for exploration drilling products as well as drill rigs and consumables for the construction, overburden and percussive drilling industries.

In connection with the sale, the Company expects to record a one-time, non-cash charge of approximately $3 million in the first half of 2009, primarily related to foreign exchange losses.

Boart Longyear describes itself as the world's leading integrated drilling services provider (contract drilling) and products manufacturer for the minerals industry, with a substantial presence in the environmental & infrastructure and energy industries and the manufacture of capital equipment (rigs) and consumables for the drilling industry, including its own Drilling Services division.  Products include diamond drills and hydraulic and pneumatic production drills as well as consumables for both sectors.

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