Imdex Ltd · ASX:IMD
Imdex — Investor Presentation (January 2023)
41 slides from Imdex's investor presentation, Jan 19, 2023
Slide 1: Proposed Acquisition of Devico and Equity Raising
Proposed Acquisition of Devico and Equity Raising 19 January 2023 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA Classification | Restricted
Slide 2: Important Information and Disclaimer
Disclaimer Any decision to purchase New Shares in the Retail Entitlement Offer must be made on the basis of the information to be contained in a Important Information and Disclaimer separate offer booklet to be prepared for eligible retail shareholders (Offer Booklet), and made available following i
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Limitation on information relating to Devico but identify the split of intangible assets and goodwill which are currently grouped in the pro forma balance sheet. All information in this Presentation relating to Devico, including in relation to historical performance and operations
Slide 4: Disclaimer (cont.)
Disclaimer (cont.) There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. A number of important investment banking services to, IMDEX. Further, they may act as market maker or buy or sell those securities or associated derivatives as factors
Slide 5: Table of contents
PROPOSED ACQUISITION SUMMARY Table of contents DEVICO OVERVIEW STRATEGIC RATIONALE 1H23 TRADING UPDATE AND OUTLOOK EQUITY RAISING OVERVIEW APPENDICES Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 5
Slide 6: Proposed acquisition summary
Proposed acquisition summary Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 6
Slide 7: Proposed acquisition summary
Proposed acquisition summary • IMDEX has entered into a binding agreement to acquire 100% of the issued and outstanding shares of Devico AS (Devico) for an enterprise value of ~A$324m (NOK2,200m)1 Acquisition (the Acquisition) overview • Acquisition price implies a CY2022 EV/EBITDA multiple of ~11.2
Slide 8: Highly significant acquisition of a highly complementary business in key growth markets for IMDEX
Highly significant acquisition of a highly complementary business in key growth markets for IMDEX Strong market leadership position in Europe, and a global operating footprint, that delivers IMDEX the #1 market position in Europe, and consolidates IMDEX’s #1 market position globally1 Clear technol
Slide 9: Acquisition in core business is fully aligned with IMDEX's growth strategy
Acquisition in core business is fully aligned with IMDEX’s growth strategy 1. TECHNOLOGY LEADERSHIP Targeted R&D to win market share Devico has world class R&D facilities in Trondheim, which have developed the NEW PRO DUCT S, NEW PRO DUCT S, NEW market leading DDT, a portfolio of ST, and will comp
Slide 10: Devico overview
Devico overview 10 Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA
Slide 11: Devico technology product suite complements IMDEX technology product suite
Devico technology product suite complements IMDEX technology product suite (in both Rock Knowledge sensors and Drilling Optimisation solutions) Sensor Technologies Directional Drilling Technologies (~46% of CY2022 Revenue1) (~54% of CY2022 Revenue1) #2 supplier globally2 #1 supplier globally3 Market
Slide 12: Devico market footprint expands the IMDEX market footprint globally, with clear strength in Europe
Devico market footprint expands the IMDEX market footprint globally, with clear strength in Europe IMDEX is a leading global mining technology company that enables drilling FY22 REVENUE BY contractors and resource companies to safely find, define and mine Devico’s products allow mining companies to
Slide 13: Devico's exceptional financial profile underpinned by track record of growth and attractive margins
Devico’s exceptional financial profile underpinned by track record of growth and attractive margins DEVICO CY2022 STRONG TRACK RECORD OF 17% 33% FINANCIALS5 GROWTH 3Y REVENUE 3Y EBITDA CAGR1 CAGR1 A$61m BEST IN CLASS ~80% ~60% REVENUE MARGINS CY2022 ST CY2022 DDT GROSS MARGIN2 GROSS MARGIN2 A$29m DI
Slide 14: Strategic rationale
Strategic rationale Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 14
Slide 15: Compelling strategic rationale
Compelling strategic rationale 1 2 3 Strengthens IMDEX core Expansion of mine site Highly complementary Mining-Tech leadership presence globally product suite Through a combination of market, Including a strong presence in Enhances the IMDEX product client, product and cloud technology Europe, and g
Slide 16: Combined market position strengthens IMDEX core strategy offering
1 Combined market position strengthens IMDEX core strategy offering #1 #1 #1 ROCK KNOWLEDGE DRILLING OPTIMISATION REAL-TIME DATA AND SENSORS 1 PRODUCTS 2 ANALYTICS 3 • Combination of IMDEX’s leading • IMDEX is the clear market leader in • Consolidation of IMDEX HUB-IQ™ and sensors products with Devi
Slide 17: IMDEX technical leadership strengthened with world class R&D and manufacturing capabilities
1 IMDEX technical leadership strengthened with world class R&D and manufacturing capabilities OVERVIEW IMDEX INNOVATION HUBS Market leading patent protected technologies that act • Devico’s Trondheim facilities to become a regional innovation and additional EUROPE as a barrier to entry and position
Slide 18: World class R&D and manufacturing facilities to form an innovation hub in the growing European mining market
1 World class R&D and manufacturing facilities to form an innovation hub in the growing European mining market Devico’s world class Norwegian facilities will be R&D philosophy aligned with IMDEX, utilising a critical to support IMDEX’s growing European disciplined stage gate development process cust
Slide 19: Extended market presence in key mining regions globally provides enhanced platform for growth
2 Extended market presence in key mining regions globally provides enhanced platform for growth GLOBAL IDENTIFIED SUPER SITES 1 COMBINED PRESENCE ON SUPER SITES 1 North America South America Americas 43 13 22 / 43 12 / 18 5 new sites 5 new sites 51% penetration 67% penetration Europe Africa EMEA
Slide 20: Acquisition increases IMDEX's exposure to key industry megatrends
2 Acquisition increases IMDEX’s exposure to key industry megatrends KEY INDUSTRY TRENDS MARKET GROWTH OUTLOOK 17% Global mining megatrends will drive increasing use of sophisticated technologies to unlock value from orebodies globally Increasing depth of deposits is expected to drive demand for Dire
Slide 21: Complementary product suite, enabling IMDEX to offer a comprehensive solution to customers
3 Complementary product suite, enabling IMDEX to offer a comprehensive solution to customers SENSOR TECHNOLOGIES DRILLING OPTIMISATION PRODUCTS Combined Offering Combined Offering Higher Higher North Seeking DDT Instrumented Upcoming Devico offering Gyro VALUE ADD / PRICE Survey Tools RSS VALUE
Slide 22: A combination of two leading technology portfolios
3 PRODUCTS A combination of two leading technology portfolios DRILLING OPTIMISATION ROCK KNOWLEDGE REAL-TIME DATA PRODUCTS SENSORS AND ANALYTICS • #1 in drilling optimisation fluids and • #1 in market with the broadest range • Analytical and interpretive software fluid engineering advice1 of sensors
Slide 23: Synergies from combination to drive value creation
4 Synergies from combination to drive value creation SIGNIFICANT CROSS-SELLING IDENTIFIED COST EFFICIENCY OPPORTUNITIES OPPORTUNITIES FOR IMDEX • Improve IMDEX client choice through expanded ST stack, and • Devico’s operational footprint highly complementary with IMDEX’s accelerate survey technology
Slide 24: Acquisition in core business is fully aligned with IMDEX's growth strategy
Acquisition in core business is fully aligned with IMDEX’s growth strategy 1. TECHNOLOGY LEADERSHIP Targeted R&D to win market share Devico has world class R&D facilities in Trondheim, which have developed the NEW PRO DUCT S, NEW PRO DUCT S, NEW market leading DDT, a portfolio of ST, and will comp
Slide 25: 1H23 trading update and outlook
1H23 trading update and outlook Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 25
Slide 26: Trading update and outlook
Trading update and outlook STRONG 1H23 RESULTS (UNAUDITED) POSITIVE START TO 2H23 1H23 • Preliminary unaudited 1H23 results reflect continued strong demand $m (unless indicated otherwise) (Unaudited) 1H22 VAR% for IMDEX product portfolio Revenue 198.8 167.8 +18.5% • Promising start-up following trad
Slide 27: Equity raising overview
Equity raising overview Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 27
Slide 28: Equity raising details
Equity raising details • A$224 million (before costs) equity raising consisting of: — A fully underwritten A$75 million institutional placement (Institutional Placement) under IMDEX’s Listing Rule 7.1 capacity, — A fully underwritten A$146 million offer of 1 share for 6 accelerated non-renounceable
Slide 29: Disciplined approach to transaction funding
Disciplined approach to transaction funding Sources Uses3 Funding Sources A$m Funding Uses A$m Equity – Institutional Placement 75 Acquisition consideration4 334 Equity – Entitlement Offer 146 Estimated transaction fees and costs5 19 Equity – Conditional Placement 3 Total Funding Uses 353 New Shares
Slide 30: Pro forma balance sheet
Pro forma balance sheet1 A$m IMDEX Pro forma Equity Raise2 / Debt Funding Devico Acquisition3 30 June 2022 30 June 2022 30 June 2022 Cash & Cash Equivalents 36.4 334.0 (331.0) 39.4 Plant & Equipment 55.5 - 11.5 67.0 Goodwill / Intangibles 97.7 - 318.8 416.5 Other Assets 204.0 - 18.9 222.9 Total Asse
Slide 31: Key acquisition milestones & indicative Equity Raising timetable
Key acquisition milestones & indicative Equity Raising timetable Event Date Signing of the SPA and announcement of Devico acquisition Thursday, 19 January 2023 Announcement of Equity Raising Thursday, 19 January 2023 Placement and Institutional Entitlement Offer opens Thursday, 19 January 2023 Annou
Slide 32: Appendices
Appendices KEY RISKS INTERNATIONAL OFFER RESTRICTIONS 32 Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA
Slide 33: Appendix A: Key risks
Appendix A: Key risks Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 33
Slide 34: Key risks
Key risks Introduction Potential for dilution and control risk Upon completion of the Institutional Placement and Entitlement Offer, the number of Shares in the Company will increase from There are a number of risks, both specific to the Company and of a general nature, which may, either individuall
Slide 35: Key risks (cont.)
Key risks (cont.) Due diligence risk and risks. It is possible that despite such analysis and the best estimate assumptions made by IMDEX, the conclusions drawn are The Company undertook comprehensive due diligence investigations in respect of the Acquisition. While the Company considers that this i
Slide 36: Key risks (cont.)
Key risks (cont.) Country risk 3. Key Investment Risks The Acquisition necessarily involves risks associated with expansion into South American and African markets. Investors should note that Stock Market Fluctuations developing countries could be subject to rapid and significant change and that the
Slide 37: Key risks (cont.)
Key risks (cont.) Acquisition and divestment risks cease to work with, suppliers who do not meet these minimum expectations. From time to time, the Company considers acquisition and divestment opportunities. Whilst due diligence is undertaken in connection with Environmental risk such opportunities,
Slide 38: Key risks (cont.)
Key risks (cont.) Intellectual Property Risks corruption legislation and law enforcement. The patents, brand names, trademarks and other intellectual property of the Company are regarded as critical to its success. Accordingly, The Company maintains anti-bribery and anti-corruption routines and poli
Slide 39: Appendix B: International offer restrictions
Appendix B: International offer restrictions Classification | Restricted | NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA 39
Slide 40: International offer restrictions
International offer restrictions This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, Cayman Islands this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country
Slide 41: International offer restrictions (cont.)
International offer restrictions (cont.) Norway persons"). The investment to which this document relates is available only to relevant persons. Any person who is not a relevant person This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian S