West Perth-based drilling products company Imdex Ltd is back on the acquisition trail, has finalised its $3.5 million payment to fully acquire Canada-based drilling fluid based system manufacturer Poly-Drill Drilling Systems Ltd.
West Perth-based drilling products company Imdex Ltd is back on the acquisition trail, has finalised its $3.5 million payment to fully acquire Canada-based drilling fluid based system manufacturer Poly-Drill Drilling Systems Ltd.
The full text of an Imdex announcement is pasted below
Further to the announcement to the market on 12 June 2007, Imdex Limited (Imdex)(ASX Code: IMD) is pleased to announce that it has finalised an agreement to acquire all of the shares in Poly-Drill Drilling Systems Limited (Poly-Drill) for A$3.5 million effective from 1 July 2007.
The purchase price of A$3.5 million was satisfied by the:
- Payment of a cash consideration of A$1.75 million; and
- Issue of 1,212,751 ordinary shares at A$1.44 per share, being the issue price determined by the closing weighted average share price on the 5 business days prior to 1 July 2007. These shares will be held in voluntary escrow for a period of 12 months from 1 July 2007.
Poly-Drill undertakes the manufacture and sale of polymer drilling fluid based systems and fluids and solids control activities from Calgary, Canada. The fluid systems developed enables drilling without the use of numerous conventional drilling fluid products, such as fluid loss control additives and gels. The fluid systems are in use throughout North America and have established new standards in drilling fluid technology.
Poly-Drill also has a solids control system called the Zero Discharge Drilling system. The filtration system removes suspended solids from drill water which reduces drilling costs, eases the removal and disposal of potential pollutants, conserves water and recycles drilling chemicals in the drilling process.
Poly-Drill is also working towards commercialising a solids control system for the removal of oil from drill cuttings.
Due to environmental issues, many countries require oil cuttings/sludge from oilfield drilling activities to be removed and some countries are seeking to enforce a zero impact policy for the environment. This provides markets for the Poly-Drill solids control equipment in conjunction with other Imdex group products. Several markets exist globally for this technology.
Poly-Drill is complimentary to the existing Drilling Products and Services business of Imdex and the acquisition facilitates the global expansion of Imdex's business. The aim is to become a significant drilling fluids and chemicals supplier to the mining, oil and gas and water well industries in North America and a leading provider of solids control equipment globally.
This transaction is in line with the Imdex strategy to grow its business globally and build value for shareholders.
The benefits this transaction delivers to Imdex and its shareholders are that:
1. It is complementary to the current Imdex drilling fluids and chemicals business;
2. It provides good growth opportunities and is consistent with Imdex's global expansion strategy;
3. It supplies the mining, oil and gas and water well industries and establishes for Imdex a base for the North American region; and
4. Through the solids control equipment, provides an additional revenue stream from the global oil and gas industry.
