“Reflex is a leading supplier of borehole survey equipment to the exploration, mining/quarrying and construction industries globally,” Imdex said yesterday.

“Its innovative technology offers cost-saving solutions through the use of electronic instruments to deliver survey data accurately and in a timely fashion.”

Imdex said the acquisition facilitated the expansion of its product range and broadened the locations in which it currently operated.

The acquisition also complemented the existing Imdex business that was already the exclusive Reflex distributor in Australia and the Asian region and strengthened the company’s skill base, including its ability to develop and market products internationally, according to the company.

Imdex said it intended to retain the existing Reflex management team to maximise the opportunities available from combining the two businesses.

“The transaction will further boost the market presence of Imdex as it positions itself as a global supplier of services to the exploration and drilling industry,” the company said.

“The existing operational locations of Reflex in Canada, South Africa and South America will facilitate the market penetration of Imdex’s existing product range, including the new generation electronic core tool developed and sold by Ace and used in the diamond drilling market.

“As well as the business advantages for Imdex, the current Reflex operations will also benefit from their linkage with Imdex. Reflex has recently targeted the oil and gas sector, where Imdex already has a strong presence which will be of assistance to Reflex once it becomes a part of the Imdex group.”

The projected earnings before interest and taxes for the year ending December 31, 2006 for Reflex is about $5 million on revenue of roughly $15 million. Imdex directors continue to expect the group to achieve revenue growth of about 15% with total revenue of $55 million and an EBIT margin of 15% in 2005-06 before the impact of the Reflex transaction.

Reflex’s current owner, SMAFI, will have the right to convert the note into 20.8 million Imdex shares at a price of 50c per share at any time until June 30, 2008. The coupon rate will be 8% per annum.

Under the terms of the agreement, conversion will be triggered automatically by the Imdex share price reaching $1/share. Any Imdex shares issued to SMAFI prior to June 30, 2008 will be held in voluntary escrow until that date.