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Press release from CNW Group

Major Drilling completes the acquisition of Bradley Group and closes enhanced credit facilities

Friday, September 30, 2011

Major Drilling completes the acquisition of Bradley Group and closes enhanced credit facilities07:48 EDT Friday, September 30, 2011/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/MONCTON, NB, Sept. 30, 2011 /CNW/ - Major Drilling Group International Inc. ("Major Drilling" or the "Corporation") (TSX: MDI) is pleased to announce that it has completed the acquisition (the "Acquisition") of Bradley Group Limited ("Bradley Group"), a drilling company based in Rouyn Noranda, Quebec (Canada). The purchase price (the "Purchase Price") payable in connection with the Acquisition was $80 million, subject to customary adjustments, of which $72 million was paid at closing with the balance of $8 million being subject to a hold-back over 3 years.Through the Acquisition, Major Drilling has added Bradley Group's 124 rigs to its base of 577 rigs. The addition of Bradley Group's rigs, approximately 80% of which are surface drilling rigs and approximately 20% of which are underground diamond drilling rigs, furthers the Corporation's strategic focus on specialized drilling. Also, the Acquisition involves the addition of Bradley Group's highly experienced workforce of approximately 860 employees, experienced management team and existing contracts in Canada, Philippines, Colombia, Mexico and Suriname. Subsequent to the Acquisition, Major Drilling will have a total fleet of 701 rigs and approximately 5,220 employees.In conjunction with the Acquisition, the Corporation also announces the closing of $100 million of new and extended credit facilities for a five-year term from its existing lenders, The Bank of Nova Scotia and The Toronto-Dominion Bank. These credit facilities replace the Corporation's existing facilities.The portion of the Purchase Price payable on the closing of the Acquisition was financed using the net proceeds of the Corporation's previously announced equity offering of approximately $70 million of subscription receipts (the "Subscription Receipts") exchangeable for common shares underwritten by a syndicate of underwriters led by TD Securities Inc., which closed on September 28, 2011, and a portion of the proceeds available under the new and extended credit facilities.Exchange of Subscription ReceiptsWith today's closing of the Acquisition, the escrow release condition for the Subscription Receipts has been met and the Subscription Receipts will automatically be exchanged on a one-to-one basis for common shares of Major Drilling. No dividend equivalent payment is payable to holders of Subscription Receipts as no record date for any dividend declared by the Corporation on its common shares has passed since the issuance of the Subscription Receipts.About Major DrillingBased in Moncton, New Brunswick, Major Drilling Group International Inc. is one of the world's largest metals and minerals contract drilling service companies. To support its customers' mining operations, mineral exploration and environmental activities, Major Drilling maintains operations in Canada, the United States, South and Central America, Australia, Asia and Africa.This press release may contain forward looking information within the meaning of applicable securities laws including, without limitation, statements with respect to the benefits that may accrue to the Corporation and its shareholders as a consequence of the Acquisition. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, integration of the Bradley Group business, failure to realize the Acquisition benefits, potential undisclosed liabilities associated with the Acquisition, and expansion and acquisition strategy. Readers are cautioned that the foregoing list is not exhaustive. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of this press release, and the Corporation undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.All dollar values are quoted in Canadian dollars unless otherwise indicated.THIS NEWS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES AND IS NOT AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF MAJOR DRILLING, NOR SHALL IT FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH ANY CONTRACT FOR PURCHASE OR SUBSCRIPTION. THE SECURITIES REFERRED TO IN THIS NEWS RELEASE WERE ONLY OFFERED IN CERTAIN PROVINCES OF CANADA BY MEANS OF PROSPECTUS. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE U.S. SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REFERRED TO IN THIS NEWS RELEASE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM.For further information: Denis Larocque, Chief Financial Officer  Tel: (506) 857-8636 Fax: (506) 857-9211