In a recent Tech Exits: Buyer's Corner interview, Rielly Milne, VP of Marketing at Corum had the opportunity to talk to Martin Hjerpe, Senior Vice President for M&A and Strategy at Eprioc, a leading productivity and sustainability partner for the mining and infrastructure industries. Based in Sweden, the company develops and produces innovative, safe and sustainable drill rigs, rock excavation and construction equipment and tools. It also provides other aftermarket support as well as solutions for automation, digitalization and electrification.
Earlier this year, Epiroc acquired Corum client MineRP, a South African software vendor, whose platform improves productivity in planning and operations by integrating various technical and financial applications in the mining industry.
In the interview, Hjerpe discussed his company’s acquisition strategy, the role of technology in the mining industry, and his experience with the M&A process. Here are highlights of that interview.
[Rielly Milne]: Martin, can you introduce yourself and Epiroc?
[Martin Hjerpe]: My name is Martin Hjerpe. I'm the Senior Vice President for M&A and Strategy at Eprioc. Epiroc is a global mining equipment company. We're leading in our field with underground drill rigs, underground load and hole equipment, surface drill rigs, hydraulic attachments, and similar. We've been helping mining companies drive productivity across the world for many decades, but one thing that has been a constant for us is innovation and driving change in our industry. Innovation can be anything from improved equipment, better drill bits, better automation, et cetera. But in the last couple of decades, it's been about technology, how software is changing our industry, and how we can do things today in a mine that we were not able to do a couple of decades ago. And hence, technology is a very important arm of our whole strategy when we think about the future of the mining and construction industries.
[Reilly Milne]: What kind of technology firms has Epiroc been acquiring?
[Martin Hjerpe]: We have been very active over the past couple of quarters and through the pandemic in the M&A space. Just over the last six, seven months, we've acquired six different companies. Just to mention a few, we've acquired MineRP, a South African-based software company, driving for data integration in the mining industry. We've acquired Meglab, a Canada-based electrification technology company that helps mines move from diesel to fully electrical in the underground area. We've also acquired Kinetic Logging Services, an Australian mining tech company that has advanced probes and software to figure out what grade and rock conditions you have down a hole in a production site of a mine. And finally, Mining Tag, a Chilea- based tech company that offers solutions for situational awareness in underground mining.
[Reilly Milne]: What changes have you seen in the M&A process during COVID? Anything you see continuing in the long term?
[Martin Hjerpe:] It's been, of course, quite different to do deals during the pandemic. But at the same time, the fundamental issues that you deal with, the fundamental challenges and rewards with acquisitions are still there. And they're basically the same, even though we need to do several things remotely. As a company, we also had an advantage compared to maybe some others during the pandemic, since we are present in basically all mining markets and construction markets around the world. So we have boots on the ground in basically all our end markets.
In many of our acquisitions, we've been able to team up a remote team of more expert people with a local team that in many cases, can actually meet physically with the company as we do the due diligence and the negotiations. I think has been very helpful for us, and it's also something we might carry on with even after the pandemic, that is, to have this improved mix of a local and remote team. It means that we can bring in the right experts, the right people from our R&D and technology arms,who can come in and talk to the companies that we are about to acquire.
It also means we can build plans together without having to travel around the world. And we can build more frequent interactions, frequent discussions when we do that. At the same time, through our local presence, we still can have the person-to-person kind of relationship building and trust building that I think is quite important. Both the acquiree and the acquirer need to trust each other. I think that’s a very important part of this whole game, and that is easier to build when you actually can meet in person. Not impossible to do remotely, but easier when you can meet.
[Reilly Milne]: So this blue collar company, a mining company, which probably started with steel and coal is now all about software and technology.
[Martin Hjerpe]: And I would add to this that our industry is really changing. Mining and construction already looks quite different from what it did 20 years ago, and it will definitely look different 20 years from now. There's a match made in heaven between a company like us and many of the tech companies that we acquire. When we acquire a company, we can bring the application knowledge into our industry and help our customers, the mining customers, adapt the idea or the technology and scale it, and therefore, reap the benefits so that productivity can increase.
[Reilly Milne]: So what do you think is the future of mining?
[Martin Hjerpe]: Twenty, thirty years from now, it's going to be very different from what we have today. Lots of mines are going to be fully automated. It's going to be electric vehicles rather than diesel driven, especially underground. You're going to have a lot of technology that needs to go in both the equipment and the mine control systems and the mine planning systems to make that work. And it's going to be a much safer environment for everyone. There's going to be less energy consumption in the mines, much more environmentally friendly than it has been in the past couple of decades.
[Martin Hjerpe]: But that's not going to happen unless companies like us and the technology companies out there that drive innovation on a daily basis, cooperate and make the industry change. And it's quite an exciting vision that we might have. And all the minerals that we need to dig up in the world to be able to make the climate technology, climate change challenge, et cetera, the electrification of our societies, they will come from the ground. And if you can then dig them up in a productive way that is safe and environmentally friendly, we do have a fantastic future in front of us.
[Reilly Milne]: Is there anything else we didn't talk about that you think is worth mentioning?
[Martin Hjerpe]: There's a lot to be said about acquisitions and especially from a large industrial like us acquiring technology companies. There will always be some cultural challenges that we need to iron out, but I truly believe that the best value that we can create together and the best possible productivity changes in the industry happen when we cooperate and when we join forces. And M&A is, of course, a very important tool for us to join forces with tech companies. So that's why I'm very optimistic about the future. I truly see that we will continue to do acquisitions in the tech area for the foreseeable future.
To learn more about the transaction between Epiroc and Corum client MineRP, click here.