Imdex Limited and Coretrack Limited reports an agreement to merge under which Imdex will acquire all of the shares and options in Coretrack.

Overview of the proposed merger Under the agreement, to be effected through a Scheme of Arrangement, Coretrack share and option holders will receive a total of $28.4 million in the form of 43.39 million Imdex shares issued at 65.5 cents per share.

Under the terms of the agreement, Imdex will issue Coretrack shareholders 0.61 Imdex ordinary shares for every one Coretrack ordinary share, and will issue 0.305 Imdex ordinary shares for every one Coretrack listed option, and consideration based on similar terms for Coretrack’s unlisted options.

Imdex post-merger will be owned approximately 82% by current Imdex shareholders and 18% by Coretrack shareholders and option holders.

Creation of a company with world class global oil & gas technologies When completed, the transaction will create a merged entity with world class global oil & gas down hole technologies that are in high demand from blue chip corporate customers. The merger will be EPS accretive for both sets of shareholders, with Imdex expecting the acquisition to be EPS accretive within two years and become a substantial contributor to group earnings from 2011.

For Coretrack shareholders, the merger delivers greater certainty in terms of funding and commercialisation of the Company’s down hole oil & gas technology.

Imdex Managing Director Bernie Ridgeway said the merger with Coretrack represents a natural addition to the Company’s down hole technology division, already well-positioned for growth in the global oil & gas sector.

“This is an attractive opportunity for Imdex to add an innovative, world class technology on the verge of full scale commercialisation,” he said.

“We see significant future earnings upside by adding Coretrack’s leading edge oil & gas down hole technology to Imdex’s existing products,” said Mr Ridgeway.

“The technology will deliver the Imdex Group strong earnings potential in the medium term and will be EPS accretive in FY11.

“Imdex has a proven track record of growth through quality acquisitions of proprietary technology companies, and a successful history integrating and marketing new technology.

“Imdex’s proposed merger with Coretrack complements our growing portfolio of down hole instrumentation assets and is well aligned with our growth strategy and fundamental objective to continue to grow Imdex’s exposure to the oil and gas sector.”

Coretrack Managing Director Nanne van't Riet said the proposed merger represented an exciting opportunity for his Company’s shareholders.

“The opportunity to align ourselves with a financially-strong and reputable company such as Imdex will provide Coretrack shareholders with greater potential for long term growth in a diversified global mining and oil & gas business,” said Mr van’t Riet.

“Imdex is an established company with a global market presence and strong customer relationships, and will be able to fully capitalise on the opportunities that exist and bring forward the commercialisation of Coretrack’s technologies.”

Tags: Coretrack Limited, Imdex Limited