Aspen Technology, Inc. (AspenTech), an industrial software solutions firm, announced that it has entered into a definitive agreement to acquire Micromine – a global player in design and operational management solutions for the mining industry, from private equity firm Potentia Capital and other sellers for AU$900 million in cash (approximately US$623 million).
What does Micromine bring AspenTech’s portfolio?
The transaction complements AspenTech’s existing asset optimization solutions and positions the company in a leadership role to deliver the “Digital Mine of the Future,” in support of excellence in operations with a focus on safety, sustainability, reliability, and efficiency.
AspenTech is now uniquely positioned to help clients address the dual challenge of meeting the demands of a growing population with an increasing standard of living, while reaching sustainability goals. AspenTech’s expertise in digitally transforming the chemicals and oil and gas industries will be vital to the mining industry as it embarks on rapid digitalization.
Micromine participates in the Smart Mining Market, a market which in 2022 is about $11.5bn. Based on Micromine’s tech, their segments of the total Smart Mining Market are $5.3bn and cover Data Management and Analytics, Smart Asset Management and other solutions.
With a 35-year track record of success and 280 employees across 22 offices, Micromine provides mission critical solutions for over 800 blue-chip clients across all mining operations and commodities with a focus on various metals essential for the energy transition such as lithium, cobalt and nickel, base metals like copper and iron ore, and precious metals like gold.
What were the executives’ thoughts on the transaction?
“Digitalization is vital for the industry to become sustainably sound and operationally excellent for decades to come. Micromine’s broad solutions span the breadth of the mining cycle from geological exploration and data management to resource estimation, mine design, planning, scheduling and production control,” said Antonio Pietri, President and CEO, AspenTech.
“As we indicated when we announced the transaction with Emerson, AspenTech has gained additional flexibility to strategically deploy capital for growth. Combining AspenTech’s product portfolio and reach with Micromine’s mission-critical tech and leadership in the mining industry will equip customers with a comprehensive offering and the end-to-end ability to drive efficiencies across the entire mining value chain, while helping them meet the dual challenge.”
“The majority of organizations in the mining industry are in a nascent stage of digitalization. Accelerating their digital initiatives through a broad suite of software apps and the expertise from AspenTech is a unique opportunity for our clients,” said Andrew Birch, CEO, Micromine.
“Our vision has always been to create an ecosystem that connects experts across the exploration and mining value chain, using new and existing tech to deliver better outcomes for clients. Micromine solutions complement AspenTech solutions perfectly with resultant capabilities of the whole combined company that are greater than the sum of the parts.”
“Joining forces with AspenTech reinforces this vision and will be the key to delivering the next generation of efficiencies in the sector,” Birch said. Micromine is expected to be accretive to AspenTech on a free cash flow basis within the first 12 months of the transaction closing.
What were the terms of the transaction?
AspenTech currently intends to finance the transaction through a combination of cash on hand and additional indebtedness and has entered into a commitment letter with JP Morgan Chase Bank, N.A. (JPM) pursuant to which JPM has committed to provide an unsecured bridge term loan in the amount of US$475 million, subject to customary limited conditions.
The acquisition is expected to close in the fiscal second quarter of 2023, subject to regulatory approvals. Goldman Sachs & Co. LLC and Atrico Pty Ltd are financial advisors and DLA Piper is the legal counsel to AspenTech. JP Morgan is the financial advisor and Johnson Winter & Slattery is the legal counsel to Micromine, Potentia Capital and the other sellers.