Orica Ltd., East Melbourne, Victoria, reported that it has entered into a binding agreement to acquire Axis Mining Technology. The purchase price comprises upfront cash consideration of A$260 million and a deferred earn-out payment up to a maximum of A$90 million, contingent on financial performance and other conditions being met.
Orica said the associated costs will be funded through the proceeds of a fully underwritten A$650 million institutional share placement. The placement will be conducted at A$16.00 per share, representing a 7.0% discount to the last traded price of A$17.20 on Aug. 2. The placement will result in approximately 40.6 million new shares being issued, representing approximately 9.9% of its existing issued capital.
Additional proceeds from the placement will be used to fund incremental trade working capital requirements arising as a result of global supply chain dislocations, and also provide balance sheet capacity.