SYDNEY, AUSTRALIA: Multi-award-winning Australian technology company Calix Limited has entered into a binding agreement to acquire 100% of US-based Inland Environmental Resources (IER) and successfully completed a placement of $12 million to cover both the cost of the acquisition and additional capital for accelerating US market expansion.

Calix has entered into a binding agreement to acquire 100% of the issued capital of IER for total consideration of US$6.5 million.

The acquisition of IER is consistent with the Company’s focus of expanding its markets utilising its patented Magnesium Hydroxide value chain into water and waste water, infrastructure, aquaculture, freshwater lake remediation, and agriculture.

IER purchases locally sourced magnesium oxide and “hydrates” it to magnesium hydroxide. IER has 4 manufacturing facilities in Washington State and Iowa, selling well over 20,000 tonnes per year to over 80 customers.

The acquisition provides numerous commercial synergies and it is expected that these will be value accretive to Calix. In the shorter term, Calix will be looking to drive top-line revenue growth in the US through expansion in existing geographies with more than a thousand Municipal Wastewater authorities across the 9 US states where IER operate, there is significant market opportunity remaining with IER only having penetrated less than 1% of these as potential customers.

Calix’s current traction in California and Hawaii for odour control, phosphate removal and fats/oils/greases (FOGs) control will be introduced in the IER states. Additionally, demonstrating the complimentary offering, Calix plans to leverage IER’s food processing expertise to expand its offering in California.

Expansion into new geographies and segments: Synergies are expected from improved MHL stability and performance, particularly associated with extension of delivery envelopes into new markets and smaller / niche MHL dosing set-ups requiring minimal servicing.

Longer-term the Company will be looking to drive margin growth and introduce more highly active products via its patented calcining technology.

Calix believes there is potential to establish a strategic relationship with a North American -based magnesium oxide producer, where a local calciner for very high surface area magnesium oxide and carbon dioxide capture for enhanced oil recovery could bring further strategic benefits. IER has two active patents in MHL chemistry, which combined with Calix’s multiple patent portfolio, brings considerable IP power.

Doug Kelly, President of IER, said: “IER is excited about joining the Calix team to utilise the Company’s unique MHL product stability and reactivity characteristics to drive further growth into our primary North American markets and expand the applications of these high quality, environmentally friendly technologies.”

Phil Hodgson, Managing Director of Calix, said: “IER represents a great opportunity to leverage our technology into a great local US company to accelerate growth. We look forward to welcoming the IER team to Calix and working with them to build a great business in the US”.