- Water and waste water treatment company De.mem (DEM) is looking to break into the Western Australian market with the acquisition of Capic
- Based in Perth, Capic supplies specialty chemicals to several major clients, including BHP Billiton, Northern Star, Pilbara Minerals and Iluka Resources
- De.mem will pay a maximum of $5.1 million for the acquisition, which consists of both a base consideration and potential milestone payments
- Completion of the deal remains subject to a definitive agreement being signed, and the two companies have a period of three months with which to negotiate the terms
- Shares in De.mem remain suspended and last traded at a price of $0.34 each on March 12
Water and waste water treatment company De.mem (DEM) is looking to break into the Western Australian market with the acquisition of Capic.
Based in Perth, Capic supplies specialty chemicals for water treatment applications to a number of major clients, including BHP Billiton, Northern Star, Pilbara Minerals and Iluka Resources.
De.mem said the deal provides it with increased scale and geographic diversification, a complimentary product range and customer base, and a variety of potential cross-selling synergies.
According to today’s announcement, the Australian–Singaporean company will fork out up to $5.1 million for the acquisition of Capic, which will consist of a base consideration and potential milestone payments.
The base consideration of $4.4 million will, in turn, consist of roughly $3.4 million in cash and $1 million in De.mem shares. These shares will be issued at a price equal to the 30-day volume weighted average share price prior to today and will be subject to a 24-month escrow period.
The future payments will consist of three revenue-based packages of $250,000, made up in equal parts cash and shares.
De.mem and Capic have agreed to a three-month negotiation period, after which a definitive agreement is expected to be signed.
Upon completion of the deal, Capic’s founder and chief executive will become De.mem’s Managing Director of the new De.mem-Capic subsidiary, which has been set up specifically to acquire Capic’s assets and will represent De.mem’s Western Australian business going forward.
Shares in De.mem remain suspended and last traded at a price of $0.34 each on March 12.