The CEO of UK-based SRJ says Australia is the ideal market to list its industrial tech business
SRJ Technologies has spent years building out market-leading engineering products with a global application. But when it comes to its next phase of growth, it thinks Australia is the best fit.
The company’s executive team has been Down Under this week, meeting with investors as it wraps up its pre-IPO funding round ahead of an ASX-listing by early next year.
CEO Alexander Wood said the roadshow had been met with good investor appetite, which meant SRJ would probably use up the extra flexibility it flagged in the IPO documents.
The company provides engineering solutions for large-scale industrial projects across multiple industries, including oil & gas. It’s products include high-tech repair clamps for pipe leaks and weldless pipe couplings.
Along with sophisticated Australian investors, the pre-IPO round was anchored by a Europe-based shipping company. Aussie motorsport legend Mick Doohan has also taken a stake.
While it’s looking to public markets to fund its next stage of growth, Wood said the company had spent years — and millions in R&D — building a product with sustained competitive advantage.
“There’s a number of weldless products in the market but they haven’t received the same level of accreditation,” he says.
“In terms of the business case, one of the first major things we aimed for was intellectual property that’s unique and defendable.”
“The next step was to meet rigorous global industry standards that allow us a platform to sell products into the market. We’ve done that to a high standard now, so from a risk point of view for investors, it’s a portfolio with a combination of unique tech and industry approval.”
SRJ is expanding globally via a partnership strategy, that gives it flexibility to operate with incumbent players in multiple jurisdictions.
So with a patented product and a global market place, what attracted the team to the ASX? Speaking with Stockhead, Wood said the local market was a natural fit for the company — both culturally and commercially.
“For one thing the country has some of the largest LNG producers in the world, which is a very relevant industry for the tech we’re bringing to market,” Wood said.
“And ultimately, I don’t think there’s a general understanding of this tech globally the way there is in Australia.”
“There’s a lot more investment in the resource sector here so it’s simpler to get the message to institutional and HNW (high net-worth) investors.”
“We also think the practical approach Australians have to life and business is a good fit. So those factors culminated in this being the best place to launch publicly.”
Interestingly, the SRJ team has received some “significant offers” from Tier-1 energy VC firms, including Aramco Ventures — the VC wing of global oil giant Saudi Aramco.
SRJ worked the deals through to final documentation, but ultimately couldn’t agree to the term sheets.
“We found they placed quite restrictive covenants in relation to the ability of the business to either exit or expand, which we weren’t prepared to accept,” Wood said.
“In that sense, we thought the freedom — the ability to present a vision — and secure funds within the public capital markets was a more attractive option.”