Adelaide-based technology company Codan Limited has agreed to sell its wholly-owned subsidiary Minetec to Caterpillar Holdings Australia for approximately A$18 million and a volume-based earn out over the next five years.
Minetec provides unique high-precision tracking, productivity and safety solutions for underground hard-rock mines. The company’s technology enables real-time monitoring and control of mining operations, allowing miners to visualise the whole mine in order to optimise productivity and enhance safety.
Following completion, Codan will provide manufacturing services to Caterpillar for up to five years, to ensure a successful transition and continuous supply to Caterpillar customers.
Codan’s Managing Director, Donald McGurk, said the company’s decision to sell Minetec follows a strategic review of the business which showed it had not scaled to a level that supports the ongoing investment required for a technology-based business.
“As we evaluated our strategic options, we concluded that the best outcome for Minetec to achieve its potential was to discuss the transfer of the business to Caterpillar,” Mr McGurk said.
“We believe that Caterpillar is the more appropriate owner, as they continue to be the market leading supplier to the mining industry, with an extensive global dealer network covering 172 dealers across 190 countries.
“Caterpillar embraced this thinking, leading to today’s announcement. In particular, Caterpillar saw the benefits of an integrated business under their ownership”.
The sale isexpected to complete in July 2021.