Sign up Australia
Proactive Investors - Run By Investors For Investors

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.


Analysis

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.



Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

View full XTE profile View Profile

XTEK Ltd Timeline

Related Articles

The D3S detector kit
April 21 2018
Kromek, formerly Durham Scientific Crystals, was incorporated in April 2003 to commercialise technology that had been developed in the Physics Department of Durham University over a period of some 20 years.
Picture of XTEK's products
May 04 2018
Patersons' price target of $1.15 implies upside of 130% relative to XTEK's current share price.
office
Thu
“[PeopleFluent] brings interesting technologies back to us … particularly in terms of interactive video and social collaboration tools”

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use