Imdex (ASX:IMD) has entered into a binding agreement to acquire 35-year-old global mining-tech company Devico for an implied enterprise value of $324 million.
The proposed acquisition represents a significant extension of Imdex’s core business globally.
Devico has enjoyed ‘exceptional’ year-on-year growth and attractive margins and has a global operating footprint and a high-quality and diversified customer base, Imdex says.
About 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 company reported CY2022 revenue of $61 million and CY2022 EBITDA of $29 million. The business has demonstrated its ability to scale over the last three years with a revenue3 CAGR of 17% per annum, IMDEX says.
Devico is a global mining-tech company, established in 1988 and headquartered in Trondheim, Norway. It has a workforce of about 200 personnel and business entities across 15 countries.
Devico’s portfolio of technologies complements Imdex’s core business. The combination of 2 leading sensor technology businesses will strengthen Imdex’s market leading position with the integration of Devico’s #1 Directional Drilling Technologies business expected to unlock significant value for IMDEX shareholders, the company notes.
Following completion of the proposed transaction, Imdex will have increased scale and market penetration, particularly in Europe and South America, as it further increases its presence on mine sites globally.
The existing management and technical team at Devico are seen as a key asset for Imdex and are expected to remain in the business following completion. Key management personnel (KMP) have entered into agreements with Imdex to reinvest a portion of their proceeds from the proposed acquisition through the subscription of Imdex shares, demonstrating the commitment to the success of the Proposed Acquisition for Imdex.
“The proposed acquisition of Devico is consistent with IMDEX’s growth strategy and is a logical next step”
Commenting on the proposed acquisition, Imdex Chief Executive Officer Paul House says: “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.
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.”
Imdex Chairman Anthony Wooles says the company rigorously assessed the proposed transaction and its strategic and cultural alignment.
“Devico shares Imdex’s vision of harnessing technologies to enhance the mining industry and has an equal passion for customer success”
“Importantly, Devico shares Imdex’s vision of harnessing technologies to enhance the mining industry and has an equal passion for customer success. The structure of the transaction is prudent and ensures IMDEX maintains a conservative balance sheet, with strong cashflow to support rapid deleveraging.”
Devico was founded in 1988 by Viktor Tokle, who remains one of the majority shareholders prior to completion of the proposed acquisition. Devico is a supplier of directional drilling technologies and sensor technologies with more than 30 years of delivering innovation worldwide.
Victor Tokle, the founder of Devico says: “I am truly proud of what Devico has become since my wife and I started the business back in 1988. It would not have been possible without the help and support from all the great people we have come across, both employees and clients. Our journey from our vision in 1988 to a ‘world leader in directional core drilling, borehole surveying and accompanying software’ will be accomplished by the proposed acquisition.”
Write to Adam Orlando at Mining.com.au
Images: IMDEX Ltd
