Mining services firm Dynamic Group Holdings (ASX:DDB) has entered into a binding agreement to acquire Airwell Flow Testing, a division of privately held fluid management company Airwell Group
Dynamic is acquiring all of assets and intellectual property of Airwell Flow Testing from Airwell for $2 million, including a $500,000 deferred payment in 2H FY2024.
Completion of the transaction is planned to occur in February 2024 subject to satisfaction of customary conditions precedent for a transaction of this nature.
Dynamic says Airwell Flow Testing has built an outstanding reputation and has a team of experts in the flow testing industry, having serviced a number of Western Australian based clients for over 20 years.
Over this period, Dynamic notes Airwell Flow Testing has developed proprietary flow testing software and hardware that is tailored to its tier-one customers and has the ability to fully monitor and control flow testing systems remotely from its Perth headquarters via Supervisory Control and Data Acquisition (SCADA).
Water bore flow testing is critical for assessing the quantity, quality, and sustainability of water sources and provides information for managing water resources to ensure compliance with environmental and regulatory standards.
Dynamic Group CEO Geoff Newman says the company’s water focused business, Welldrill, has a strong understanding of Airwell Flow Testing having partnered to provide additional non-drilling services to existing Welldrill customers.
As part of this experience working together, material synergies have been identified with the Welldrill business.
“While only a relatively minor bolt-on acquisition, Dynamic has identified a number of organic growth opportunities and synergies with the existing Dynamic business that should assist in driving growth.
The acquisition bolsters the offering of Dynamic’s water-well business, Welldrill, and provides a foothold in the growing flow testing industry which is lower capital intensity than existing drilling operations. We look forward to an accelerated integration of Airwell Flow Testing within Dynamic.”
The transaction has been structured as an asset purchase of plant and equipment along with acquisition of systems relating to the Airwell Flow Testing division and associated intellectual property rights.
The upfront consideration of $1.5 million will be funded through the extension of an existing asset finance facility with the deferred consideration to be funded through existing cash reserves and/or further asset finance.
Dynamic) is a supplier of various specialised drilling services as well as blasting services to clients in the mining and construction sectors in Western Australia. The company operates under 3 entities – Dynamic Drill & Blast, Orlando Drilling, and Welldrill.
Dynamic focuses on mining and construction projects within a range of commodity sectors, including iron ore, lithium, and gold. Dynamic also undertakes short term specialised drilling and blasting projects.
Write to Adam Orlando at Mining.com.au
Images: Dynamic Group
