Mining services company Ausdrill is taking over underground hard-rock mining contractor Barminco Holdings  for $271.5 million.

Barminco was recently awarded the contract to mine Mount Colin near Cloncurry for CopperChem and also has the contract for underground mining at MMG’s Dugald River mine in north-west Queensland.

“Barminco and Ausdrill are a great fit, with the businesses providing complementary services and having worked together for a decade through our AUMS joint venture,” Barminco chief executive officer Paul Muller said.

“By bringing these two businesses together and creating Australia’s second largest mining services company, we will be able to provide a broader range of services for our customers and generate additional opportunities for our employees.

“Barminco had a strong 2018 financial year and our focus is to continue safely delivering results for our customers.”

Barminco shareholders will own 22.1 per cent of the fully paid ordinary shares in Ausdrill post-completion of an associated Ausdrill equity raising and closing of the transaction, while Barminco non-executive chairman Keith Gordon will join the Ausdrill board.

Barminco released its FY2018 results yesterday, reporting revenue of $731.9 million and a net profit after tax of $38.6 million.

Ausdrill reported a 95.7 per cent increase in net profit after tax to $61.1 million for the full year ended 30 June 2018.

“Ausdrill is pleased to present its shareholders with this transformational opportunity,” executive chairman Ian Cochrane said. “We have delivered operationally in FY18 and the Barminco transaction would broaden our strategic footprint to be Australia’s clear #2 mining services company and set in place a balance sheet with the capacity to achieve sustainable and profitable growth.”