Micro-X taps investors for $33m, ends Thales alliance

An ASX minnow focused on high-tech X-ray systems for global healthcare and defence markets is tapping shareholders for $33m as it ends a key alliance with France’s Thales Group.

Micro-X managing director Peter Rowland at its Tonsley facility.

ASX-listed Micro-X has announced a sudden end to its multimillion-dollar partnership with French giant Thales and is raising $33m from investors to fund the exit and grow its US presence.

The South Australian cold cathode X-ray technology group, valued at $133m, makes lightweight, mobile systems for the global healthcare and defence security markets.

Its shares sank about 10 per cent to 34c in early trade on Monday after the company said it was raising $30.5m from institutional investors and another $2.5m through a share purchase plan (SPP).

The funds will be used for “strategic growth” as well as pay back global security systems company Thales’ $5m convertible loan.

Thales and Micro-X entered into an $10m alliance in April 2019 for six years. Thales was going to invest the funds in Micro-X as they collaborated on products.

Micro-X on Monday said it would use some of the funds raised to “support insourcing development and manufacture” of a new simplified X-ray tube for an IED (improvised explosive device) Imaging Camera.

This would save the program costs of $6.5m and halve the development time, ending the technical collaboration and other arrangements with Thales.

Micro-X managing director Peter Rowland said recent developments made by the team have vastly increased the commercial potential of the technology and reduced the complex­ity, time and cost of develop­ment with a targeted IED Imaging Camera product launch in mid-2022.

“At a strategic level, we are planning to build on the business momentum we have built over the past months and maintain our first-mover advantage, bringing us closer to our goal of four global production lines operating with high margins within five years.”

Mr Rowland said he was pleased to have attracted the level of investor commitments to propel Micro-X in its expansion.

The funds will also drive expansion in the US to progress Micro-X’s two early-stage contracts with the US Department of Homeland Security for specialist airport security scree­n­ing systems.

The business will open an office in Seattle, US.

Sales and marketing infrastructure to accelerate its other healthcare products will also be boosted.

Remaining funds will strengthen the balance sheet into 2023.

Micro-X placed 89.7m shares at 34c to raise the $30.5m, an 8 per cent discount to its 37c share price close on January 27.

The 7.4m shares on offer under the SPP are also priced at 34c each, with a target to raise $2.5m.