Sandvik buys Deswik to boost digital mining profile

By Dominic Ellis
Deswik will be part of Sandvik's newly formed Digital Mining Technologies division within Sandvik Mining and Rock Solutions

Sandvik has signed an agreement to buy Australian-based Deswik, which provides mine planning software, and the transaction is expected to close during Q1 2022, subject to relevant regulatory approvals.

Deswik will be part of a newly formed division, Digital Mining Technologies, within Sandvik Mining and Rock Solutions, and Sandvik estimates transaction costs of approximately SEK50 million in Q4.

By acquiring Deswik, Sandvik gains a top-tier supplier of integrated software platforms that support digitalisation throughout mine planning stages, with more than 10,000 current licenses.

In a statement, Sandvik said Deswik has "a high quality customer base", and its strong profitable growth and low customer churn will further enhance Sandvik's presence within software and digitalisation, and help accelerate growth.

"I am very pleased that we continue to execute on our shift to growth strategy, and continue to broaden our offering with digital solutions that increase productivity in the customer's value chain," said Stefan Widing, president and ceo of Sandvik.

"Mine planning and operations management is a key growth opportunity, and this complementary acquisition and our new Digital Mining Technologies Division will strengthen our digital offering and enable us to provide customers a more comprehensive suite of technologies."

Deswik will fill a value chain gap in Sandvik Mining and Rock Solutions' offering, increasing upstream mining coverage and enabling opportunities for end-to-end optimisation solutions, including, for example, incorporating electrification at the mine planning stage. Its core software suite includes computer-aided 3D mine design, scheduling, operations planning, mining data management and geological mapping.

Deswik also offers a range of consultancy services, including mine planning, scoping, software implementation and training support.

"Deswik's second to none software suite combined with Sandvik's digital and automation offering creates a clear world leader in digital solutions for the mining industry. Combining Deswik's skills in mine planning and scheduling with our equipment and automation expertise will open new opportunities for optimizing our customers' mining value chain," added Henrik Ager, president of Sandvik Mining and Rock Solutions.

Deswik will form one of three cornerstones, complementing Sandvik Mining and Rock Solutions automation solutions and the Newtrax telemetry and collision avoidance solutions, in the newly-created division Digital Mining Technologies.

It has been established to lead the industry development of underground sustainability and productivity solutions in electrification, automation and digitalisation.

Privately-owned Deswik, established in 2008 and headquartered in Brisbane, has approximately 300 employees and operates 14 offices in 10 countries. The company has demonstrated strong and profitable growth over the past decade in the large and growing mining software market.  

Its revenue per October 2021, on a rolling twelve month basis, totaled AU$79 million, of which the share of recurring revenue was approximately 45 percent, and with an EBITA margin of approximately 30 percent. Impact on earnings per share (excluding non-cash amortization effects from business combinations) will be accretive. The parties have agreed not to disclose the purchase price.

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