Industrial welding gets set for major disruption as K-TIG completes ASX listing
Originally developed by the CSIRO, the K-TIG technology uses a single pass, full penetration keyhole technology to provide significant advances on conventional welding techniques.
ASX-newcomer K-TIG (ASX: KTG) has made its market debut this morning, bringing forth its industry-disruptive and award-winning welding technology.
The self-described “welding disruptor” is looking to commercialise a technology originally developed by the Australian Government’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) that could ultimately “change the economics of fabrication”, according to the welding tech company.
Its proprietary and patented technology won the Australian Industrial Product Of The Year award in 2014 and the DTC Defence Industry Member Award in 2015.
In order to complete its ASX listing, K-TIG chose to acquire an existing company called Serpentine Technologies, in what’s known as a “reverse takeover”, or RTO for short.
As part of the process, the company raised $7 million from institutional investors including Perennial Value Management and Alium Capital Management, as well as high net worth individuals and retail investors.
Under the offer, K-TIG issued 35 million shares at $0.20 per share with the total number of shares on issue totalling 144.5 million – thereby giving K-TIG a market capitalisation of $28.9 million upon its debut.
“This is a landmark moment for the company, and we are delighted to be joining an esteemed cohort of Australian technology companies listed on the ASX,” K-TIG chief executive officer David Williams said.
“Such strong support for the offer demonstrates how highly the technology sector is regarded. This listing allows us to take K-TIG and its disruptive technology to the next stage of growth and development,” he added.
The ASX listing is expected to generate both operational and commercial momentum for the new company. Funds raised are expected to be used in support of K-TIG’s overarching growth strategy through “enhanced sales and marketing initiatives, supporting R&D projects, purchasing long-lead capital items and providing working capital”.
Technological precision
The core themes behind K-TIG’s product are improved efficiency and operational supremacy over existing welding methods that are considered labour and energy-intensive.
The company says its high-speed precision technology welds up to 100 times faster than traditional TIG welding, achieving full penetration in a single pass in materials up to 16mm in thickness.
K-TIG claims that its avant-garde approach can complete a welding job, that would normally take six hours, in around three minutes – thereby slashing production times for industrial manufacturers and materials companies that employ welding on a large scale in their day-to-day operations.
Some of the industries already benefitting from K-TIG’s technology are pressure vessel and tanks piping manufacturers as well as the nuclear sector.
According to K-TIG, the technical improvement in performance is the result of extensive research into the gas-tungsten arc process, keyhole physics, weld pool stabilisation, heat removal and process efficiency.
The technology is said to work across a vast range of applications and is particularly well suited to corrosion-resistant materials including stainless steel, duplex, super duplex, titanium and a wide range of reactive metals, exotic materials and superalloys.
Given the vast improvement over current welding methods, K-TIG has already amassed an illustrious list of clients in 20 different countries including blue-chip customers such as General Electric, Siemens, Bilfinger, Doncasters and the UK Nuclear Advanced Manufacturing Research Centre.
Recurring WaaS business model
In addition to the technical angle, the company is also proposing to deploy a so-called welding-as-a-service (WaaS) business model which K-TIG hopes will “change the economics of fabrication”.
The WaaS model will operate on a recurring basis, whereby clients approach K-TIG on a job-by-job basis as opposed to being sold a piece of equipment for a one-off fee.
Such a licensing revenue model is expected to provide K-TIG with long-term recurring revenue and strategic relationships with its customers that could lead to further product development over time.
The welding tech company announced its WaaS business model will “provide service delivery via its cloud-linked controller and the generation of long-term recurring revenue streams for K-TIG from a global customer base”.
“The successful completion of the transaction and capital raising ensures we move forward rapidly with our growth plans. K-TIG has an exciting future and we look forward to updating the market on developments as we secure key milestones,” K-TIG chairman Stuart Carmichael said.