SA welder K-TIG gears up for ASX debut
A South Australian company, which has commercialised CSIRO-developed welding technology in 20 countries, will list on the Australian sharemarket within days.
SA Business
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A Mile End welding technology company, which has caught the eye of global industrial giants, starts trading on the Australian sharemarket within days to “get more visibility” among investors.
Keyhole TIG Welding (K-TIG) raised $7 million through the issue of up to 35 million shares at 20c each for a reverse takeover or ‘backdoor listing’ deal with listed ‘shell’ entity Serpentine Technologies. K-TIG was due to start trading on Monday, but that has been pushed out to later this week, pending finalisation.
K-TIG’s patented technology — originally developed by the Australian Government’s CSIRO and the Cooperative Research Centre for Welded Structures — uses a robotic arm to weld, reducing the amount of time taken to finish the job. A welding process that traditionally takes more than six hours can be completed in three minutes using K-TIG, the company said.
K-TIG employs eight staff at a warehouse-based operation in SA, and supplies its technology in 20 countries, counting GE, Siemens, Doncasters, the Defence Materials Technology Centre and the UK Nuclear Advanced Manufacturing Research Centre, among its blue-chip clients.
The three parts to its business include the manufacture of the torch, the smarts and controls that are used to operate it and the software that underpins the system.
Chief executive David Williams was appointed to lead the company’s sharemarket debut earlier this year.
“We are at the stage now where the technology has been proven and we need to take it forward.
“We have also changed our business model, from unit sales to licensing, so the changing cashflow means it would be a good time to get more visibility among potential investors,” he told The Advertiser.
“The backdoor listing, while about the same in terms of cost and time to an initial public offer, has a key difference, which is, we now have a company that has a number of shareholders and systems in place that are needed for a publicly listed company.”
Mr Williams did not reveal the names of institutional shareholders that had bought into K-TIG, but said he was “pleasantly comfortable” with the names coming on board. The company will also look to boost employee numbers in 2020 to 12.
In April this year, online design education company Serpentine agreed to the deal. The name of the listed entity will be changed to K-TIG, and trade under a new code, KTG.
The money raised will be used to develop K-TIG’s new Welding-as-a-Service business model and invest in sales, marketing and infrastructure, especially in the vessel and piping industries.
The prospectus to investors stated K-TIG made more than $1 million in revenue to the end of June, but reported a loss of $1.7 million.