Consideration comprises around $7 million worth of Hughes shares at 26c per share and the retention of existing external debt of $17.4 million.

JSW had turnover of around $30.6 million in the 2013 financial year.

The company owns 24 specialist drill rigs and its services include grade control and resource definition, water drilling, production, dewatering, monitoring and geothermal bores, as well as specialist mine services.

JSW was formed in 2010 through a management buy-out from Ausdrill-Brandrill of the original Strange Drilling business.

The company has facilities in Kalgoorlie, Boddington, Port Hedland and Perth and a workforce of 140.

Hughes chairman Robert Hackett said the acquisition extended the company’s Queensland and New South Wales business.

“JSW provides Hughes with a platform to accelerate our strategic objective to extend our core blast hole drilling operations into the iron ore mine of northwest WA, either as a contract driller or through our Reichdrill manufacturing operation as a supplier of rigs,” he said.

“The earnings accretive profile of the JSW acquisition reflects the JSW business as it currently stands, with the majority of its FY14 budgeted order book secured.

“Hughes’ purchasing-related cost advantages and success in securing work in iron ore blast hole services should progressively add to the value of the transaction to shareholders.”

Brandrill co-founder Jeff Branson and NRW Holdings co-founder John Silverthorne will join the Hughes board as part of the acquisition.

Hughes shares closed half a cent higher at 25.5c.