Everyday Mining Services (ASX: EDS) has entered into a merger with unlisted Hughes Drilling Pty Ltd.

Hughes Drilling is one of Queensland’s largest coal production drilling specialists operated by Bob Hughes. Hughes Drilling operates at eight mine sites and its clients include the industry’s premier coal mining contractors and owners.

EDMS will acquire 100% of Hughes, which will include the businesses known as Hughes Drilling and Express Hydraulics.

EDMS will issue 721,731,312 ordinary shares and 360,865,656 performance shares in EDMS to Hughes.

Hughes would then own between 67% and 75% of the issued shares in EDMS, depending upon the level of conversion of the performance shares.

The performance shares will convert to ordinary shares only if the Hughes businesses achieve normalised net profit after tax of $8,000,000 for the financial year to 30 June 2012.

Current forecast for Hughes over this period is a net profit after tax of $6,750,000.

The agreement is conditional upon completion of due diligence by both parties which is expected 31 October, approval by EDMS’s shareholders, and any necessary regulatory approval.

The agreement signed is binding.

After the merger is completed, the EDMS will be renamed Hughes Mining Services Limited.