Creating a leader: Independence is the golden ticket for Minova

Carve-outs are always complex, and even more so when the market it operates in is shifting. The experience of AURELIUS has meant Minova hasn’t just survived the endeavour but is in fact thriving as the backer’s hands-on approach means it gets under the skin – and indeed under the ground – for its carve-out of the mining specialist.

As a leading manufacturer of ground control products and solutions to mining and infrastructure firms, Minova helps ensure the safety and efficiency of customers’ work sites. Its innovation has seen it contribute more than 200 patents to the mining industry across its 140+ years in operation, with products including injection chemicals, pumpable grouts, rock bolts and more. Its heritage is as rich as its offering, and this creates equally rich opportunity for the future as the industry shifts more towards hard rock.

Minova has earned a strong reputation with its growing client base. This is because of its high-quality products, technical expertise and customer problem-solving with its ground support and geotechnical solutions for mining, tunnelling and surface ground engineering projects. Currently headquartered in London and with presence in over 25 countries across five continents, Minova’s footprint is certainly impressive, but this made the carve-out all the more challenging. AURELIUS’s IT capabilities and unrivalled in-house expertise meant they were able to deliver the carve-out within the agreed timeframes and TSAs, with the AURELIUS Operational Task Force working closely with Minova’s management to ensure a smooth process as the company’s IT infrastructure became fully standalone.

The shift to hard rock was a market driver AURELIUS had identified as part of its investment thesis prior to the transaction in 2022, and it is creating strong tailwinds as a drive for electrification has substantially raised demand for precious metals (hard rock mining). This is expected to quadruple by 2040, while Minova’s historical focus of soft rock is in structural decline.

Hard rock and infrastructure will form the backbone of future growth at Minova, according to Mogens Søholm, Vice President Operations at AURELIUS. “The soft rock market segment has experienced a spike in demand, particularly with the energy crisis of the last couple of years.

But today’s business won’t define tomorrow’s success, which we are convinced should be based on more sustainable sources”, says Mogens Søholm, Vice President Operations at AURELIUS. “We are therefore using funds from this segment to fuel the company’s efforts around growth in hard rock and infrastructure,” he continues.

He himself has wasted no time in rolling his sleeves, up, actually going 4km underground with the team into the world’s deepest hard rock mine, Harmony Mponeng Gold Mine in South Africa.

Strategic refocus

As Minova hadn’t been a core focus with its former parent for many years, it was clear that looking at the business through a magnifying glass would unearth some interesting discoveries.

“We know that reducing the relative exposure to thermal coal is key to a successful exit down the line,” Mogens stresses.

This evolution of focus required carefully assessing how the team operates, tearing down silos to leverage Minova’s global strength at local levels to restructure towards a more efficient growth trajectory. Indeed the firm has now structured its regional sales with dedicated segment teams to better reflect the business’s future focus areas of hard rock and infrastructure, ensuring real attention as part of the strategic refocus. Additionally, AURELIUS’s procurement and process expertise has brought substantial operational efficiencies to Minova.

The refocus also involves ensuring the company’s footprint matches its core markets and future ambitions, with AURELIUS working closely with management teams across all core regions as part of a transition focused on investing in the capability of Minova to ensure the best market knowledge. It’s meant a planned shift of headquarters to Denver, Colorado in the US, selected for its proximity to clients and talent as the city already features an industry ecosystem. A new CFO has joined from the area, bringing with him rich and relevant experience gleaned from tier one mining companies around the world which is well suited to Minova’s new base. Additional professionals have been appointed in Denver, with this HQ-based leadership team set to benefit from continuity of culture as the existing CEO relocates there from the UK.

The year ahead

M&A will be a big part of boosting Minova’s capabilities, with the firm’s first acquisition since AURELIUS took over taking place in early 2023. The purchase of Bulteck in Spain helped bring a product range of expandable bolts in-house for Minova and sent a clear signal to the market that the business was moving more firmly in the direction of hard rock.

This year will be spent investing in a new steel facility in Salt Lake City, a core hub for the hard rock market, with a view to it being fully operational next year. 2024 will also be about seeking out further M&A opportunities, possibly including acquisitions to support Minova addressing jurisdictions where local presence is key for future growth. The Latin American market will be a key region for this.

Another focus in the near- and medium-term will be on boosting the infrastructure capability of Minova.

“It’s a growth area and it’s doing well in Europe but requires development in other locations,” Mogens adds. This may take place through selected acquisitions, whether add-ons to acquire capability or through more transformational M&A as it’s quicker than growing organically.

“The alternative way of looking at business that AURELIUS brings is extremely effective for effecting operational improvements and strategic refocus,” Mogens reflects. Indeed it is: since the 2022 transaction, EBITDA has nearly tripled from pre-deal 2021 levels to the end of 2023 as the business embraces the sharper focus AURELIUS has inspired.

What AURELIUS achieved:

• Delivered a complex carve-out on time and within the agreed TSAs
• Making operational improvements to ensure the newly independent company is efficient
• Bringing a sharper focus to the business’s growth in the infrastructure and hard rock segments as soft rock segments will be in structural decline over the next decades.
• Nearly tripled EBITDA in under two years