AUSDRILL Limited signed a sale and purchase agreement to sell its Drilling Tools Australia (DTA) business to Robit Plc, for $66 million, the company announced in May.

Ausdrill said the transaction included DTA’s drill bit manufacturing and distribution business, which generates annual revenue from internal and third party sales of about $35 million.

The sale excludes the net assets of DTA’s oil and gas and spare parts business, which will be transitioned to other divisions of the Ausdrill group.

In addition, Ausdrill entered into a 2.5 year preferred supply arrangement with DTA for the supply of drill bits going forward.

DTA will continue manufacturing operations at its facility in Canning Vale, Western Australia, under a five year leasing arrangement with Ausdrill.

All current DTA employees will remain employees of DTA as part of the transaction, Ausdrill said.

Ausdrill said the transaction is in line with its strategy to refocus on its core competencies.

Ausdrill managing director Ron Sayers pleased with the transaction said the deal will assist the company in paying down debt.

“The sale of DTA provides Ausdrill with the opportunity to crystallise considerable value on a portion of the group’s earnings, generating a profit after tax in the order of $35 million and allowing us to further pay down debt,” he said.

“This is an exciting development in the rationalisation of our sector. As Robit is a renowned manufacturer of quality drilling products with an extensive global distribution network, they will be able to service Ausdrill’s drill consumable needs into the future,” Mr Sayers said.

The effective date of the sale is 30 June 2016 and is subject to customary closing conditions.

Robit is a Finnish manufacturer of high quality drilling products which it exports to over 100 countries.