SRJ Technologies has executed a share purchase agreement (SPA) to acquire 100% of the issued share capital of UK-based pipeline technology firm STATS (UK) Limited, subject to customary conditions including the buyer obtaining shareholder approvals.
SRJ said it plans to leverage the global presence of STATS to exploit cross-selling opportunities of its disruptive products and technologies, while looking to capture the growth opportunities in the energy transition with its broader range of asset integrity solutions.
The consideration payable by SRJ to STATS shareholders will comprise a combination of SRJ shares traded on the Australian Securities Exchange and cash. The transaction has an implied value of approximately £73.1 million based on a share price of SRJ of A$0.50 per share.
It is subject to customary conditions, including SRJ obtaining the required shareholder approvals, and is expected to close in the first quarter of the calendar year 2022.
SRJ also intends to undertake a fully underwritten offer of CDIs to raise A$142 million to fund the cash component of the purchase price for STATS and provide working capital for the combined group post-completion, as well as apply for re-admission of its CDIs to trading on ASX.
The private equity investor, Business Growth Fund, which has supported STATS since 2012, will realize its investment and exit the business.
“SRJ’s vision is to become a global leader in asset integrity solutions for the energy industry, and this transaction will add value, differentiation and scale to SRJ. It will drive long-term growth with meaningful revenue synergy opportunities whilst delivering a highly responsive, solutions-led service to our clients” said SRJ’s CEO Alexander Wood .
STATS has more than 317 personnel and eight offices in the UK, Canada, USA, Middle East and Asia Pacific.
The company’s current CEO Leigh Howarth will be appointed as an executive director of SRJ Technologies.
“The two groups share a similar DNA that is driven by a solutions-led approach to our client’s asset integrity issues,” said Howarth . “We are truly excited by the prospect of this next stage in STATS growth, not only to offer additional innovative solutions to our clients, but to do it with a trusted and capable SRJ team.”