IPO Fact Sheet: Titomic Limited (ASX: TTT)

IPO Fact Sheet: Titomic Limited (ASX: TTT)

Overview

Titomic (ASX: TTT) hold exclusive rights to commercialise technology associated with an additive manufacturing process referred to as Titomic Kinetic Fusion. This patented process was developed between the CSIRO and Force Industries. It involves the “application of cold-gas dynamic spraying of titanium or titanium alloy particles onto a scaffold”. Kinetic forces are used to bond particles together, creating the basis and shape of customised near-finished parts or products.

The cold spray technology, which is versatile across a number of applications, is marketed as a rapid manufacturing solution for “large, light and strong” componentry. Furthermore, Titomic’s process utilises unrefined or inconsistent powder particles that cannot be used by existing systems. This means a faster production time, corrosion resistance and substantially lower costs compared with other metal additive manufacturing processes. These alternatives use consistent powders and typically focus on smaller parts.

Since Titomic Kinetic Fusion does not involve any welding, nor change to the nature of the material as would occur with heat or oxidization processes, the technology is considered appropriate for load bearing applications.

Although Titomic is not currently generating income, the company has outlined several areas it will target. These include:

  • Sales and sub-licensing of its technological process and systems;
  • Manufacturing client prototypes and established parts (e.g. bicycle frames, wheelchairs);
  • Supplying input materials (powders);
  • Offering R&D prototyping and tailored programming solutions; and
  • Servicing and maintaining associated systems.

The company is currently establishing R&D and production facilities for third parties to use under prototype product licensing arrangements. Manufacturing trials are anticipated to begin in Q4 this year. If prototypes are validated, clients will be offered manufacturing licenses. These licenses will allow clients to either purchase equipment from Titomic to complete manufacturing themselves, or outsource it to the company or an approved third party.

 

Offer Details

Between the broker and institutional offers, 32.5m new shares will be issued at 20c each. In total, $6.5m will be raised. PAC Partners is fully underwriting the IPO, which subject to early closure, is open from August 17 to August 30. Thereafter, trading is expected to commence on a normal settlement basis from the 13th of September.

 

Investment Highlights

  • The global additive manufacturing industry for all products and services is forecast to grow from $6.1bn in 2016, to $26.2bn by 2022
  • The metals additive manufacturing sector is one of the fastest growing segments
  • Additive manufacturing targets a wide range of potential applications and industries
  • Titomic plan to generate income via multiple streams
  • Patents granted in NZ and Japan, and allowed for grant in the US – pending in numerous other jurisdictions, as well as a separate provisional patent application yet to be lodged
  • The company is an exclusive licensee of the technology
  • Experienced Board with broad technological, manufacturing and corporate expertise

 

Use of Funds

An IPO has been earmarked by Titomic to help the company commission its new R&D and production facility in Melbourne. The business plans to use this facility to develop parts with clients and enhance its sales and servicing prospects.

More specifically, proceeds from the IPO are expected to be distributed accordingly: new equipment ($3.9m); employment costs ($893k); IPO costs ($779k); R&D ($752k); corporate administration ($110k); sales and marketing ($58k).

 

Capital Structure

Upon listing, Titomic will have a market cap of approximately $22.7m. Existing shares account for around 66.2% of the registry, or a total of 75m out of 113.3m. A total of 5.8m shares will be issued to PAC Partners as Lead Manager for the IPO. While there are no voluntary escrow undertakings, shares held by PAC Partners, and certain shares held by seed investors, promoters and other parties related to the business, will be in escrow for up to 24 months from listing.

Directors have been issued 2m unlisted options which may be exercised at $0.30 each until 31 May 2020. Three of the company’s directors will have access to 20m performance shares, valid for 3 years after the IPO. The relevant criteria includes the company’s share price, market cap, quarterly revenue, and the number of product licenses issued.

 

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The information contained on this website in no way reflects the opinions of IPO Society. It is provided for informational services only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. The information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Detailed information may be needed to make an investment decision, for example: financial statements; a business plan; information about ownership of intellectual or industrial property; or expert opinions including valuations or auditors’ reports. The information contained on this website is not intended to be the only information on which an investment decision is made and is not a substitute for a disclosure document, product disclosure statement or any other notice that may be required under the Act, as the Act may apply to the investment.

 

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IPO Fact Sheet: Titomic Limited (ASX: TTT)
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