Opportunistic credit and special situations specialists, Arbitrium Capital Partners (“Arbitrium”) has completed its first transaction, funding the acquisition of the global exploration business of Sandvik Mining and Rock Technology by Drillman Australia, a subsidiary of the M Group of Companies.
M Group and Sandvik AB signed agreement in October 2020 to acquire the global drill manufacturing business of Sandvik Mining and Construction Tools AB. The transaction included the acquisition of Sandvik Drilling’s exploration rigs; consumables and production stock; customer list; selected trademarks and patents, and the use of the Sandvik brand name for up to five years from the date of the agreement.
Arbitrium co-founder Mukhtader Mohammed said the deal highlighted the need for alternative credit providers. “Unorthodox and creative credit solutions like ours are a vital part of the debt landscape today,” he said. “Where middle-market companies are unable to access traditional loans, we can step in to ensure that these businesses can continue to provide valuable employment, products and services to Australian people and businesses.”
Managing Director Blake Ammit said the transaction highlighted the ability of funds like Arbitrium to deliver private-equity style returns with strong downside protection via significant asset cover. “We are happy that this transaction was executed successfully, allowing us to move on to our pipeline of over $500 million of other potential deals,” he said.
The transaction was structured as a senior secured loan, and Arbitrium’s investors can expect a net IRR of more than 20%.
