Imdex Limited announced that it has signed an agreement to acquire Brazil’s System Mud Industria e Comercio Ltda (System Mud). Under the agreement, Imdex will pay approximately $9.0 million for System Mud.

Imdex Managing Director, Bernie Ridgeway, said the acquisition would strengthen the Company’s position in Latin America in relation to the manufacture and sale of drilling fluids and chemicals.

The proposed acquisition is consistent with Imdex’s focused strategy to grow the Company’s core operations in key markets. The move also strengthens Imdex’s market position in Latin America – System Mud is the leading independent drilling fluids and chemicals supplier in Brazil.

The investment is complementary to Imdex’s Drilling Fluids and Chemicals Division and has significant potential to expand the business given its complementary nature to Imdex’s current operations.

The acquisition is expected to be immediately EPS accretive. System Mud is a bolt on acquisition consistent with Imdex’s focused strategy to grow the Company’s global presence in its core operations.

System Mud was established in 1999 and is based in Itajai, Santa Catarina, Brazil. System Mud manufactures its own products and has become the leading independent drilling fluids supplier to the minerals business in Brazil.

System Mud is focused on manufacturing and marketing drilling fluid systems primarily for the mining and exploration market in Brazil.

Imdex Managing Director, Mr Bernie Ridgeway said System Mud is a natural fit for Imdex given the strong alignment of the company’s products and markets. It’s a strong business that will enhance further expansion of Imdex’s Drilling Fluids and Chemicals Division, said Ridgeway.

In addition, System Mud’s Brazilian focus is complementary to Imdex’s existing geographic footprint. The business will sit well within its existing Latin America regional operation that has been growing strongly given the substantial growth of the minerals industry in that region, said Ridgeway.

The acquisition of System Mud further supports Imdex’s aim of becoming a significant drilling fluids and chemicals supplier to the mining and water well industries globally, said Ridgeway.

The proposed acquisition is expected to be effective from 1 August, 2011 and will be wholly funded from Imdex’s cash resources and banking facilities.

Imdex is a Perth based public company whose core business is the supply of drilling fluids and chemicals and down hole instrumentation in Australia and internationally to the oil & gas, mining, water well, horizontal directional drilling and civil industries.

27th July 2011