SYDNEY, AUSTRALIA: SRJ Technologies Group announced that the acquisition of STATS (UK) Limited will not proceed.
Following SRJ’s announcements on 4 February 2022 and 14 December 2021 in relation to the transaction, SRJ advises that as a result of market volatility caused by underlying macro, geopolitical and supply chain events, the acquisition of STATS UK will not proceed, and the Share Purchase Agreement executed on 14 December 2021 has been terminated.
SRJ and its advisors explored several Australian and global funding alternatives to raise the capital required to complete the Transaction but the significant changes to underlying market conditions since the start of 2022 made this extremely challenging.
SRJ and STATS will continue to collaborate at an operational level and partner in multiple regional markets including across the UK, Canada, USA, Middle East and Asia Pacific. The strong synergy between the two businesses and the scale of the global market opportunity in asset integrity solutions has been demonstrated and the logic of a combination has been reinforced.
Management remains confident that continued execution of their strategic priorities will create value for SRJ shareholders. These priorities are focussed on both organic growth and acquisition opportunities to broaden their capabilities and market access in this prospective sector.
Alexander Wood, Chief Executive Office of SRJ said that whilst this is a disappointing outcome for all parties, SRJ will now refocus on executing its core strategy of creating a leading global player in asset integrity for the energy sector whilst continuing to build on the successful and collaborative relationship with STATS.
“I continue to believe in the merits of a combination of the two businesses but ultimately the transaction fell victim to the current levels of market uncertainty. SRJ has many exciting organic opportunities in its pipeline and we will now focus on executing on these opportunities and building value for our shareholders.”
The Company is currently conducting an initial capital raising by way of a placement of shares which will provide interim funding for SRJ. It expects to finalise the interim raising by the end of next week.
Further, the Company is proposing to conduct a further capital raising to raise sufficient working capital to lift the suspension in the securities of the Company and to pay costs of approximately £610,000 associated with engagement of advisers including legal counsel and accounting services as part the due diligence process for the STATS Transaction. The Company was not required to pay any break fee or other amounts to STATS upon termination of the Share Purchase Agreement. It is anticipated this capital raising will be concluded by mid-June.