IMDEX Limited, a mining-tech company, has presented an update on its key investment in Krux Analytics Inc.
Krux is a Calgary-based company that creates advanced drilling analytics software with real-time exploration and production drilling data applications. Its market-leading system collects, organises, and analyses drilling activity data, whether collected manually or by sensors attached to or incorporated inside the drill rig. The Krux system is agnostic, working with various drilling rigs and activities.
Krux is also introducing KruxDAQ™, a one-of-a-kind Measure While Drilling (MWD) product that receives data directly from rig system outputs and integrates it into its existing platform. When MWD data is combined with forms-based activity data, it provides better information about drilling performance and productivity. This data can be utilised to develop changes that benefit both drilling and resource businesses.
On 13 January 2023, IMDEX announced that it had engaged in a Heads of Agreement to acquire a 40% stake in Krux for $6.5 million in cash. The agreement was subject to additional due diligence, mutual board approvals, and normal terms. This process has now been finished, and the parties will proceed with the initial investment.
The parties have agreed to transfer the remaining 60% of Krux stock to IMDEX after three years. IMDEX and Krux will work together to speed up software development initiatives and discover methods to provide more value to consumers. An IMDEX representative will be appointed to Krux’s board of directors. The transaction structure ensures Krux’s expansion aspirations are supported while giving both parties clarity about future intent.
In keeping with IMDEX’s approach, the final decision will be based on the calibre of revenue generated by the Krux team, mainly SAAS revenue. The remaining 60% of the equity will be valued based on a revenue multiple of approximately 4.5×3 and will be paid for with cash reserves or a combination of cash reserves and the issuance of IMDEX shares.
“The talented Krux team are a strong strategic and cultural fit with IMDEX. The Krux offering occupies a clear industry leadership position which we are pleased to support. We look forward to working collaboratively to provide additional value and answer products to customers,” IMDEX Chief Executive Paul House said.
“This investment will accelerate the growth of the Krux platform and strengthen our position as leaders in real-time data collection for the mining industry. It reflects strong strategic alignment and importantly, an excellent cultural fit. We remain committed to staying agnostic and providing the best solutions to our customers, regardless of what other hardware or software they use. With this investment, we are excited to take our platform to new heights and continue delivering value,” Krux Chief Executive Officer Jody Conrad commented.
