Orica to Pay Up to A$350 Million for Tool Developer Axis Mining Tech — Update

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By Stuart Condie

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SYDNEY–Orica Ltd. will pay up to 350 million Australian dollars (US$242.2 million) to acquire geospatial tool developer Axis Mining Technology.

The ASX-listed explosives firm on Wednesday said it will fund the acquisition through a fully underwritten A$650 million share placement to institutional investors. It also aims to raise another A$75 million via a share purchase plan.

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Orica said it will pay A$260 million up front plus a deferred earn-out of up to A$90 million contingent on various conditions, including financial performance. The remaining funds from the raise will provide balance-sheet flexibility and working capital as a buffer against global supply chain issues, it said.

The Australian firm reiterated its fiscal 2022 earnings guidance but said it sees challenges from inflation, energy costs and supply chain issues through its 2023 fiscal year.

Managing Director and Chief Executive Sanjeev Gandhi said the strategic acquisition of Axis would strengthen Orica’s digital solutions vertical and expand its corebody intelligence portfolio upstream.

Orica expects the acquisition and associated placement to accretive on an earnings-per-share basis from the first full year of ownership.

Write to Stuart Condie at [email protected]

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Credit: www.marketwatch.com /

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