The bold move will increase the company's issued capital by 52.3%, and increase SDS's market capitalisation to $48 million.

"To date, SDS has funded its growth from the cash flows of its businesses. This placement will reduce debt, strengthen the balance sheet and provide the company with working capital to fund growth both organically, and through our continued strategy of making bolt-on acquisitions that complement existing businesses," said SDS's chief executive officer, Christian Lange.

The company has indicated that $11.5 million will be dedicated to debt reduction and $4.5 million to working capital.

Recently the drilling services company has committed itself to the development of fluid powered percussion hammer drilling with the expenditure of $10 million on the project to date.

A Steering Committee has now been appointed to the project with the aim of limiting expenditure to $1m over the next 3 years leading into commercialisation of the technology.

The company has been active this year with the acquisition of Premier Rock Tools, Seismic Supply and Metal Craft in Perth. However, the proposed acquisitions of Dural, an eastern seaboard mining supplier, and International Drill Quip, a Perth based downhole hammer manufacturer, have not gone smoothly with both transactions having gone off the rails.