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XTEK expands trajectory of growth with 3D tech acquisition

XTEK has added to shareholder value by acquiring a 3D modelling and simulation technology supplier which is already servicing urban planning developers on a global scale.
XTEK expands trajectory of growth with 3D tech acquisition

Defence and homeland security equipment provider XTEK (ASX:XTE) has further diversified its business with a deal to acquire a company specialising in 3D modelling and simulation technology for urban planning.

XTEK will acquire Simmersion Holdings via an agreement to issue 175,000 XTEK shares on a pro-rata basis based on the number of shares each existing Simmersion shareholder holds in the capital of Simmersion.

In completing the acquisition process, XTEK has agreed to issue 175,000 new securities in the capital of the company.

Simmersion will then operate as a wholly owned subsidiary of XTEK.

XTEK plans to continue the service support provided to existing Simmersion clients and potentially align its Unmanned Aircraft System (UAS) business to provide data services for Simmersion in the future.

About Simmersion

Simmersion real-time 3D simulation solutions for urban planning are used globally by city municipalities and property developers to visualise future developments as part of the assessment process and for property marketing.

Over a period of three years, the company has developed a patented groundbreaking and innovative 3D technology called Mycosm, which will bring the richness and power of the world’s best video game engines to the application and solution developer markets at an affordable price.

This unique, real-time 3D visualisation and simulation platform is targeted at the entertainment, decision support, training and e-learning sectors.

The company’s Simurban platform, meanwhile, represents a suite of 3D simulation software products to create, view and interact with accurate and realistic models of any built environment.

Simurban is used for property development assessment, strategic planning and design.

Simmersion has an extensive 3D data set covering parts of most of the capital cities in Australia, which is used in Simurban software by a number of local governments and a few property developers to visualize urban planning scenarios.


By taking control of Simmersion, XTEK has increased shareholder value through greater exposure to a 3D imaging market expected to be worth US$16.6 billion by 2020.

This move also provides XTEK with an additional potential partner for its UAS business, which currently brings in annual sales of $7.9 million via equipment distribution services throughout the Oceania region.

Customer demand for specialist UAS solutions and services is expected to increase throughout FY2016 and beyond.

Shares in XTEK have gained 29% in the past two months to A$0.49 as the company has returned to a net profit for the first time in six years, generating $12 million in FY15 revenue on momentum related to UAS and growing markets for protective equipment such as body armour.

With the global market for body armour and personal protection estimated to grow from US$1.5 billion in 2012 to $2.4 billion by 2022, the sector’s global cumulative spend between 2017 and 2022 is estimated to total $12.9 billion.

XTEK’s significant exposure to this market includes its proprietary XTclave technology, which is used in lightweight armour applications, including personal ballistic protection plates.

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