IMDEX’s Bold Acquisition Raises Questions on Integration Risks and Deferred Payments

Strategic Acquisition to Broaden IMDEX’s Earth Science Portfolio

IMDEX Limited (ASX, IMD) has announced a transformative acquisition of Advanced Logic Technology S.A. (ALT) and its subsidiary Mount Sopris Instruments Inc (MSI), marking a significant expansion in its earth science sensor and software offerings. The upfront consideration stands at €55.8 million (approximately A$98.9 million), with additional performance-based deferred payments capped at €20 million (around A$35.4 million). This move aligns with IMDEX’s strategy to unify earth systems data through leading technologies.

ALT, headquartered in Luxembourg, is renowned globally for its high-performance borehole imaging instruments and the industry-standard WellCAD software package, which supports over 500 clients in more than 120 countries. MSI, based in Denver, Colorado, complements this with its expertise in downhole rock property sensors and telemetry systems, holding a strong market position since 1951.

Enhancing Subsurface Intelligence and Market Reach

The acquisition will broaden IMDEX’s sensor portfolio by integrating ALT’s advanced optical and acoustic televiewer technologies with MSI’s rugged logging equipment. This combination is expected to substantially increase the volume and quality of orebody knowledge available to customers, addressing growing industry demand for detailed rock characterisation.

Moreover, integrating WellCAD software with IMDEX’s digital solutions aims to create a unified platform that drives recurring digital revenue and empowers faster, smarter decision-making across mining, civil, environmental, groundwater, and energy sectors. The deal also opens new channels through ALT’s global partner network, expanding IMDEX’s reach into adjacent earth systems markets.

Financial Outlook and Integration Considerations

IMDEX expects the acquisition to be earnings per share (EPS) accretive in the first full fiscal year, contributing approximately A$10 million in incremental revenue and A$2 million in normalized EBITDA. The transaction will be funded through IMDEX’s cash reserves and existing debt facilities, resulting in a pro forma net debt to FY25 normalized EBITDA ratio of 1.1x post-completion.

Goodwill recognition is anticipated at around A$60 million, with acquired intellectual property assets valued at approximately A$30 million. The acquisition will also increase amortisation expenses by about A$1 million and interest costs by roughly A$2 million annually. Full consolidation of ALT and MSI’s financials is expected after completion, subject to customary closing conditions including foreign investment approval in Luxembourg.

Leadership Perspectives and Future Growth

IMDEX CEO Paul House described the acquisition as a “transformative step” that strengthens the company’s global leadership in digital earth knowledge and subsurface intelligence. He highlighted the synergy of combining world-class sensors, software, and global client networks to deliver enhanced value across multiple sectors.

Founders and executives from ALT and MSI expressed optimism about joining IMDEX’s global platform, emphasizing the opportunity to accelerate product development, expand market access, and enhance customer support worldwide. This integration promises to carry forward their legacy of precision, reliability, and innovation on a much larger scale.