The Western Australian-based husband and wife team that founded one of the world’s largest private mining consultancies, Snowden Australia, plans to exit the business within three years having recently decided to sell the company.
The Western Australian-based husband and wife team that founded one of the world’s largest private mining consultancies, Snowden Australia, plans to exit the business within three years having recently decided to sell the company.
Managing director Phillip Snowden told WA Business News the original shareholders of the company, which includes his wife Vivien, and their business partner, John Swire-Thompson, had been considering “doing something for a while”.
They considered a trade sale or even floating the business on the Australian Stock Exchange – when major engineering and infrastructure management services company Downer EDI approached them in August.
“We liked them … and we were satisfied with the offer,” Mr Snowden said.
While the total value of the offer has not been disclosed, the publicly listed Downer did say that all the assets of Snowden were acquired on the basis of both cash and the issuing of 986,842 ordinary shares, with Snowden’s management becoming Downer shareholders from day one (December 20 2004).
For Mr Snowden the sale of the business was a tough decision, however it appeared the right one at the right time.
“The inclination to want to hang on was very strong but I am not sure if it was in the company’s best interests,” Mr Snowden said.
Established in 1987, after the Snowdens moved to Perth from South Africa, the company has grown into one of the world’s largest private mining consulting firms, diversifying from geological and resource estimation to offer suite of mining services and employing more than 140 staff throughout the world.
Mr Snowden said while he and Mrs Snowden had agreed to stay on with the company in executive roles for five years, realistically their formal link with the company could end within three years or even sooner.
While he wasn’t clear on what he would do after this, Mr Snowden said he would be close to 60-years old by then.
One thing that was clear however, was the Snowden legacy and its staff.
“I want to emphasise that the independent and confidential nature of our work will be continued under the Downer framework as a strongly independent company,” Mr Snowden told WA Business News.
“Downer have told us they are buying the brand and they don’t want things to change.”
Mr Snowden said the move would open up fantastic opportunities for current Snowden staff, both within Snowden and the wider Downer group.
Importantly, he said a strong management succession plan had been put in place before Downer made its approach.
“If it [Downer] isn’t already a major player, we feel it will become a major player in the mining services sector,” Mr Snowden said.
“Downer operates in Australia and New Zealand, is rapidly expanding in Asia and in years ahead is looking to move to other jurisdictions.
“They have indicated they are keen to expand their whole mining services capability,” he said.
Downer currently provides end-to-end engineering and management services to the public and private power, rail, road, telecommunications sectors in Australia, New Zealand, Asia and the Pacific.
Downer said it was steadily investing in its mining division to provide a complete end-to-end service by developing its contract mining division, Roche Mining.
“With the front-end capacity of Snowden and [coal consultant], QCC Resources we will be able to provide high-level engineering consultancy services in the minerals and coal industries and further Roche Mining’s ability to provide clients with a complete end-to-end service,” Downer EDI managing director Stephen Gilles said.
Roche Mining business development general manager Ross Rinella said Downer successfully acquired a similar business, QCC Resources, early last year and it was looking to replicate the success with the Snowden acquisition.
He said Snowden, which would operate as an independent subsidiary selling services under its own banner, as well as providing internal services to Roche, would add front-end capabilities, specifically in the metaliforous and iron ore sectors.
“We will support Snowden to continue to grow in all areas they are involved in,” Mr Rinella said.
Downer last week sold its foundry business, Roche Castings, to NSW-based mining industry supplier and manufacturer Bradken for $28 million
Downer said although Roche Castings was a successful business, its long-term retention was inconsistent with the company’s business strategy.
