K-TIG Plans $7–10M Capital Raise, Issues 105M Shares and Rights for MPW Acquisition

Transaction Overview and Capital Raise

K-TIG Limited, soon to be renamed Metal Powder Works Limited, has announced a significant capital raising and acquisition plan that aims to reshape its business profile. The company proposes a public offer of up to 50 million shares at an issue price of $0.20 each, targeting a raise of between $7 million and $10 million before costs. This capital raise is a key component of its agreement to acquire 100% of Metal Powder Works Inc (MPW), a US-based producer of high-quality metal powders for additive manufacturing.

The acquisition consideration includes the issue of 55 million shares to MPW vendors and 50 million performance rights, which are contingent on MPW achieving specified revenue targets and K-TIG’s share price milestones. This structure aligns vendor incentives with the future success of the combined entity.

Strategic Rationale and Business Model

MPW’s patented DirectPowderSM process offers a non-thermal, energy-efficient method of producing metal powders with superior yield (circa 95%+) and precise control over particle size and morphology. This technology compares favorably to traditional atomization methods, which typically yield around 30%. The acquisition will enable K-TIG to expand its footprint into the additive manufacturing sector, leveraging MPW’s advanced manufacturing capabilities and customer base, including major clients like Toho Titanium and Solvus Global.

Post-acquisition, the merged company will operate from offices in Pittsburgh (USA), Adelaide (Australia), and Rotherham (UK), with a strategic focus on scaling MPW’s production capacity, broadening the range of metal powders offered, and investing in advanced automation and digitization technologies.

Regulatory and Market Implications

The transaction represents a material change in the nature and scale of K-TIG’s activities, necessitating re-compliance with ASX Listing Rules Chapters 1 and 2. The company’s shares have been suspended since January 2023, and successful completion of the transaction and capital raise is critical for reinstatement to official quotation.

Investors should note the speculative nature of the investment, with key risks including the company’s current loss-making status, going concern uncertainties, reliance on a concentrated customer base, product quality and regulatory compliance risks, and competitive pressures in the metal powder additive manufacturing sector.

Independent Expert and Industry Context

An independent expert report from Stantons Corporate Finance concludes that the issue of performance rights to MPW vendors is fair and reasonable to non-participating shareholders, based on a market-based valuation methodology. The report highlights that the performance rights are structured to mitigate risk by linking vesting to both revenue milestones and share price hurdles, ensuring alignment of interests.

Complementing this, an intellectual property report confirms MPW’s robust patent portfolio covering its innovative powder production technology, with multiple granted patents and applications across key jurisdictions.

Industry analysis underscores strong growth in the global metal powders market for additive manufacturing, driven by aerospace, defense, medical, and energy sectors. The demand for high-purity, tightly controlled powders produced by advanced atomization methods is expected to accelerate, positioning MPW’s technology well within a rapidly evolving market.