Hillson Drilling

Company description

Conexus subscribed for 80% of the equity capital of Hillson in July 2007.

The investment in Hillson was made to provide start up capital for the business to enter the prospect drilling industry.

hillson-truckThe opportunity centered on service support to new owners of mineral rights flowing from the major changes that were affected by the Mining Charter and the Department of Minerals and Energy at that time.

Fundamentally the recipient of these New Order Mineral Rights had to prove the usage of these rights on a “use it or lose it” basis.

 

This created a shortage of skilled exploration drilling capacity in South Africa. Hillson filled the market gap caused by the lack of availability of drill rigs, compressors and ancillary equipment combined with a skills shortage.

The Chief Executive of Hillson Drilling is David Hill.

Investment Logic

Although Hillson Drilling filled a gap in the prospect drilling market, it was sold in June 2008, returning an IRR performance of 32% net of all fees and costs. The decision to sell was as a result of a divergence in strategy between management and Conexus.

Although the investment was held for just 11 months, it marked the first full investment cycle on a Conexus private equity deal.
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