Imdex signs definitive agreement for Flexit acquisition

West Perth-based drilling products company Imdex Ltd has announced the conditions of its $22 million acquisition of privately-owned Swedish borehole survey systems supplier Flexit AB and Flexit Navigation AB.

Imdex chairman Ian Burston announced in February that the firm would pay $12 million in cash at settlement and $10 million in shares through the issue of allot five million shares (at $2 per share) to the company owners, Claes and Birgitta Ericsson, after two years.

Should the Imdex share price be less than $2 per share after two years, the company will issue the 5 million fully paid ordinary shares in Imdex at the then trading price along with an amount of cash required to bring the market value of shares issued and cash paid at that time to $10 million.

The full text of a company announcement is pasted below

Further to the Company's ASX announcement on 20 February 2007, Imdex is pleased to announce that it has entered into a definitive agreement for the acquisition of the Flexit group of companies (Flexit).

The purchase price for the acquisition is A$22 million to be satisfied by a cash consideration of A$12 million due at settlement. Additional consideration of A$10 million will be paid on the second anniversary of the settlement date either by;

• if the Imdex share price is A$2 or greater per share, the issue of 5 million fully paid ordinary shares in Imdex; or
• if the Imdex share price is less than A$2 per share, by the issue of 5 million fully paid ordinary shares in Imdex at the then trading price plus an amount of cash required to bring the market value of shares issued and cash paid at that time to A$10 million.

Completion of the acquisition is effective 1 May 2007, subject to the approval of Imdex's Shareholders at a General Meeting scheduled for 30 April 2007.

Flexit is a significant global supplier of borehole survey systems to the mineral exploration, mining, tunneling and geotechnical industries. Flexit is based in Vallentuna, Sweden and is particularly active in Canada, South America and Africa. (see www.flexit.se for further details).

Flexit's main product range includes:

• the SmartTool - a drillhole survey system with single and multishot capability manufactured by Chardec (which was acquired by Imdex in August 2006) and;
• the GyroSmart - a technically advanced miniature digital survey system using MEMS gyro technology that is simple to use in both magnetic and non-magnetic environments.

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 to:

• Expand the Imdex product range;
• Consolidate Imdex's position as the leading global supplier of technologically advanced down hole survey systems
• Strengthen Imdex's existing skill base in the area of research and development into new products and technologies;
• Complement existing drilling products and services businesses by expanding Imdex's global reach;
• Diversify market opportunities into new or previously under-exploited markets such as the oil and gas, tunnelling, construction and quarrying industries; and
• Provide an attractive financial return.

The acquisition of Flexit is a further important step in the globalization of the Imdex drilling products and services business.