SRJ Tech debuts on ASX, raises $8m in IPO for business growth
Specialist pipeline couplings company SRJ Technologies Group (ASX:SRJ) made its debut on the ASX at midday today, following an IPO that raised $8m to fund further development of the business.
The company’s IPO was priced at 50c per share and underwritten by Morgans Corporate supported by Australian institutional investors Ellerston Capital and Regal Funds Management.
“The use of funds will support the growth of the business and support customers,” chief executive and company co-founder, Alex Wood, told Stockhead.
“There are [pending] agreements and partnerships which will take us into North and South America and progress the business in the Middle East,” he said.
Japanese company Mitsui & Co which has a broad base of assets in Australia, is an investor in the company, as are other high-profile operators who are the company’s customers.
“Companies can operate and maintain production without shutting down their assets with our products’ non-welded approach,” said Wood.
After the IPO and listing, SRJ Technologies will have a market capitalisation of $60m.
The Jersey-based UK company decided to list on the ASX because its personnel has built up extensive experience from working with major resource and energy companies in Australia.
The company has delivered projects for tier-one operators in the oil, gas and mining sectors.
“Australia is a one-stop shop and has such a rich array of resource companies,” Wood said.
SRJ’s management team has worked in the Australian mechanical coupling, repair clamp, and bolt clamping markets for more than a decade.
“Our senior team has worked here for 15 years and has experience in the Australian market. Australia gives us access to all the relevant sectors, and is perfect for building a good track record,” he said.
Company non-executive chairman Robin Pinchbeck was formerly with BP and British energy infrastructure company, Petrofac, and has 40 years’ experience in the oil and gas industries.
Starting off in the minerals sector in Australia, SRJ Technologies moved on to the petrochemicals industry, and delivered products for tier-one operators in the oil, gas and mining sectors.
SRJ Technologies has stayed one step ahead of its competitors by devising its own product solutions for different industries, leading to a great deal of proprietary knowledge for the company.
The company has 28 patents in 25 countries to its name and another 10 patents pending.
BoltEx, a bolt exchange clamp product, is a company trade-marked technology.
The company’s weld-free products are a strong competitor to traditional flange pipe joint products that require time-consuming welding.
“We looked at what operators were requiring in terms of mechanical couplings, and invented products to provide a cohesive suite of solutions for the customer and to bridge any technology gaps,” said Wood.
The company, additionally, has developed off-the-shelf products for industry customers.
“We offer simple to install products and we can design bespoke solutions should any of our generic products not be applicable. We have a high-level engineering team who will work with customers to deliver a solution,” said Wood.
A key point of difference for SRJ is its focus purely on delivering precise product technology.
“We have simplified our products and we will train customers’ staff to utilise them,” he said.
This means customers themselves organise the installation of SRJ products, dispensing with the need for the company to have its own labour force.
“We have installation partners that we work with in Australia, and we have key high-quality manufacturing partners in Australia, South America and the US, so we have significant capabilities,” said Wood.
In a post-COVID business world, companies are watching their spending very closely and want to protect the assets on their balance sheets.
They are also looking to extend the life of their assets, increase automation and avoid unnecessary shutdowns, trends that fit well with SRJ’s business model.
“We have seen the desire to de-man assets and the increased use of digital technologies,” Wood said.
Among its new products is a digital coupling technology for use on floating production storage offshore (FPSO) vessels like Shell’s Prelude, and it is working with a robotics partner.