PERTH (miningweekly.com) – ASX-listed mining-tech company Imdex has struck a A$324-million deal to acquire Norway-based mining-tech company Devico, announcing on Thursday that it would undertake a A$224-million capital raise to fund the acquisition.
Imdex told shareholders that the acquisition of Devico’s portfolio of technologies would complement its own core business, with Devico having achieved exceptional year-on-year growth and attractive margins, and having a global operating footprint and a high-quality and diversified customer base.
Approximately 46% of Devico’s revenue is generated from Sensor Technologies and 56% from Directional Drilling Technologies, which are directly utilised by resource companies globally.
“The proposed acquisition of Devico is consistent with Imdex’s growth strategy and is a logical next step. We see significant value in combining our complementary product portfolios, market-leading R&D capabilities and global presence,” said Imdex CEO Paul House.
“The addition of Devico will strengthen our position as the leading provider of advanced rock knowledge sensors and will establish our business as the #1 directional drilling technology company globally. Notably, Devico’s flagship facility in Trondheim will become a key asset for Imdex – providing us a new innovation and manufacturing hub for the European market. Devico’s expertise, professionalism and their relentless customer focus matches our own and we are excited about what our teams can achieve together for the mining industry. We have commenced integration workstreams and are confident in a smooth transition.”
To fund the acquisition, Imdex will undertake a one-for-six accelerated non-renounceable entitlement offer and a non-underwritten conditional placement to raise up to A$224-million.
The company will raise an initial A$75-million of this funding by placing 34-million fully paid ordinary shares, at a price of A$2.20 each, to eligible institutional investors. The issue price represents a 10.9% discount to Imdex’s last trading price on January 17.
The institutional placement will be conducted under the company’s existing placement capacity.
A further A$146-million will be raised in the one-for-six accelerated non-renounceable entitlement offer, also priced at A$2.20 a share, and Imdex is expected to issue 66-million new shares.
The company is also proposing to undertake a conditional placement to certain of its directors and management, with up to 1.5-million shares to be issued, raising A$3-million, subject to shareholder approval.
In addition to the A$224-million capital raise, the acquisition will also be funded by a A$120-million drawdown from a new senior secured term loan and A$9-million from key management personnel reinvesting a portion of their proceeds from the proposed acquisition into Imdex shares.