Orica announces acquisition of Axis Mining and Equity Raising

Orica Limited (ASX: ORI) announced that it had signed a binding agreement to purchase entire share capital in the entities that own Axis Mining Technology for AU$260 million in cash. In addition, a deferred earn-out payment up to a maximum of AU$90 million is payable based on Axis’ cumulative EBITDA generated from 1 October 2022 to 31 December 2024 and contingent on certain key management remaining employed by Orica during the Earn-Out period. Axis is a leader in designing, developing, and manufacturing specialised geospatial tools and instruments for the mining industry.

The acquisition price, which comprises both upfront consideration and earn-out, and associated costs will be funded via the proceeds of a fully underwritten AU$650 million institutional share placement. The company will also undertake a non-underwritten share purchase plan for eligible shareholders in Australia and New Zealand.

The acquisition and placement are forecasted to be EPS accretive from the first full year of ownership, and the return on net assets contribution from the acquisition is anticipated to be in line with the company’s stated guidance of 10-12%.

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