AQN - Aquirian Limited

[System]

Aquirian Limited is an emerging global oriented provider of innovative solutions to the resources market with offerings that deliver capability and resourcing to support its clients across the sector.

Aquirian's business was founded in 2017 with the incorporation of TBS Mining Solutions. TBS Mining Solutions provides consumable products, blasting products and equipment to the mining sector. In 2018, TBS Workforce was established. TBS Workforce provides labour hire services to the mining industry.

Subsequently, Aquirian has made 2 strategic bolt-on acquisitions to strengthen, diversify and further grow its operations. In 2019, it acquired Modular Training, and in 2020, it acquired the Maglok Australia business. Modular Training provides specialised shotfiring training services to the mining industry and Maglok Australia provides explosive storage products to the mining, defence and law enforcement industries.

Aquirian operates a multi-disciplined integrated business model primarily focused on the mining industry. The Aquirian Group comprises 2 key divisions, as follows:

• Mining Services Division:
  • TBS Mining Solutions
  • Maglok Australia
    
    
• People Services Division:
  • TBS Workforce
  • Modular Training

Each division accounts for approximately half of the total revenue of the Aquirian Group. The acquisitions of Maglok Australia and Modular Training are relatively recent. Accordingly, these businesses are still in their infancy as part of the Aquirian Group.

It is anticipated that AQN will list on the ASX during July 2021.

Welcome to Aquirian Limited

Aquirian Limited (ASX:AQN) - mining services company providing people, equipment & innovative products to the mining & resources market.

www.aquirian.com

 

[Dona Ferentes]

Listing date	27 July 2021 11:30AM AEST ##
Contact details	https://www.aquirian.com/ Ph: +61 8 6370 5400
Principal Activities	Emerging global oriented provider of innovative solutions to the resources market with offerings that deliver capability and resourcing to support its clients across the sector.
GICS industry group	TBA
Issue Price	$0.20
Issue Type	Ordinary Fully Paid Shares
Security code	AQN
Capital to be Raised	$8,000,000
Expected offer close date	16 July 2021
Underwriter	Not underwritten. Pursuit Capital Pty Ltd and JP Equity Holdings Pty Ltd (Joint Lead Managers)

 

[Dona Ferentes]

AQN trading above its 20c IPO on Day One. Opened at 24c and staying around this level most of the day

 

[Tommy Shelby]

Intriguing little company.

Management team has a lot of depth with backgrounds in Orica and Rio Tinto etc.

They talk about the synergies between the different businesses which are;

• TBS Workforce - temp work placement
• Modular - RTO org for drilling/blasting
• TBS mining - leases mining equipment (not much equipment)
• Mag Lok - explosive storage, supply and install
• Collar Keeper - new tech for blasting/drilling

I know they're related but do they have synergies? Each has a completely different business model with unique operations. They will also valued differently - eg RTO vs mining equip lease.

How do you value a company like this? It would be great if they divided up reporting for each business including tracking margin contribution. Eg they paid $700k for Mag Lok but how much revenue is it contributing and at what margins?

Note the latest report shows a drop in EBITDA margin, assume most likely due to the issues with TBS Workforce and increased investment being expensed.

 

[Dona Ferentes]

Thanks for bringing this one up, again. Must have another look; they seem to have added a few more activities/ businesses, as you point out. It may be difficult to call them divisions just yet.

I do wonder, sometimes, if the transition from larger to smaller organisations is all it's cracked up to be.

"Management team has a lot of depth with backgrounds in Orica and Rio Tinto etc."

The skillsets would be different; of course the technical side would be there but processes and initiative probably need shaking up?

 

[Tommy Shelby]

You're absolutely right. It's great to have worked at an institutional level and had exposure to those systems and scale but how much of it translates to a company at the start up stage? I know a lot of insti level guys in property who would struggle at a boutique developer.

I see them having an advantage with the industry connections and networks that they'd have in place. They'd have a much higher success rate tendering for work coming from their background. A potential example of that is that Orica is a client for their services.

 

[Dona Ferentes]

The 100% owned subsidiary Western Energetics has been awarded a three-year agreement for the supply of an Energetics and Technology package to Aurenne Mt Ida Gold Pty Ltd for their project in Western Australia.

Key Terms:
➢ Agreement value: $20 million (circa)
➢ Agreement term: 3 years commencing 01 January 2025
➢ Services: Provision of energetics and technology package.
➢ Capital requirement: Nil

Managing Director – Greg Patching commented:
"I’m proud to announce that Western Energetics has signed a significant agreement with the Mt Ida gold mine in Western Australia. Through this partnership, we will supply a unique package of energetic products, initiating systems, and our innovative Collar Keeper® drill technology, showcasing our commitment to a customer-focused approach.

This tailored solution not only optimises blast outcomes but also eliminates ‘single use’ plastics, reduces costs, and enhances efficiency for our valued customers. Western Energetics continues to play a key role in delivering our strategy across a growing customer base.”