Mining software-as-a-service provider, K2fly will buy the software assets developed by an offshoot of Wesfarmers subsidiary, CSBP in an all-scrip deal that will see CSBP emerge as the major shareholder of K2fly with just over 10 percent of its register. The deal, which involves K2fly picking up the business assets of CSBP offshoot, Decipher Mining, is valued at $3.7 million.
Decipher, which was created by Wesfarmers’ industrial division about four years ago, operates a cloud-based software as a service involving the monitoring of and compliance systems for tailings storage facilities management and mine rehabilitation for the resources industry.
Perth-based K2fly formed an alliance with Decipher last year as the pair combined their complementary technology strengths to build an integrated monitoring and governance platform for tailings storage facilities.
Subject to shareholder approval next month, K2fly will issue 11.36 million of its shares to the Wesfarmers owned CSBP, who will emerge as the largest shareholder of K2fly with 10.13 per cent of the company’s expanded issued capital.
K2fly Chief Commercial Officer, Nic Pollock said: “We have been partnered with Decipher for nearly a year now and we have found many synergies in our joint offering, go to market capabilities, and operational models that the acquisition was a logical combination. We are both lean start-up companies and there is virtually no duplication and many upsides to the deal. We are pleased that Anthony Walker, the Decipher Chief Executive Officer, will be joining K2fly in a senior executive position as well as the core Decipher team.”
Decipher Chief Executive Officer, Anthony Walker said: “We have formed a very close working relationship with the K2fly team, and we all share a passion for delivering better ESG (environmental, social and governance) monitoring and compliance outcomes to the mining industry and the communities in which they operate.”
Adding Decipher to its swelling suite of product offerings will help pave the way for K2fly to further accelerate its growth in the mining software space, an area that K2Fly is fast placing its global stamp on.
The company also recently acquired the SATEVA software service business, which provides major iron ore producers with mine geology applications for orebody knowledge and control. That deal cost around $4 million in cash and shares.
K2fly says it has picked up more than $850,000 in new orders since completing the acquisition three months ago, which is a material number compared to SATEVA’s total revenue of $1.4 million in the 2020 financial year.
With the iron ore price soaring more than 100 per cent in the past year or so and the outlook for iron ore looking buoyant, K2fly’s expansion strategy, particularly in that commodity area, appears to be paying dividends.
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By Matt Birney
