A fertilizer development company, Gensource Potash announced the agreement to acquire 100% of the issued and outstanding shares of Innovare Technologies which is a software development solutions and services company, on Wednesday.
The acquisition of Innovare’s shares by Gensource Potash will be accomplished through a reorganisation in which existing Innovare owners will transfer their shares to Gensource in return for new Gensource common shares.
Following the reorganisation, Innovare will be a wholly-owned subsidiary of Gensource Potash, with Innovare’s operations being integrated and overseen by Gensource.
For potash and other soluble mineral mining projects, Innovare Technologies specialises in drilling, solution mining, and processing technologies.
Gensource is a fertiliser development firm situated in Saskatoon, Saskatchewan, with plans to become the province’s next fertiliser producer.
Over the last 6 years, Gensource and Innovare have collaborated on the development of Gensource’s modular potash production module.
The first project to use a Gensource module will be the company’s potash operation near Tugaske, Saskatchewan.
Innovare’s technology brings together industry-proven approaches with new, inventive, and patented technologies to reduce capital and operating expenses for the Tugaske Project and beyond.
Gensource will be able to control the intellectual property that allows it to fulfil its strategic business strategy, which management believes will be the future of potash production, by bringing this technology in-house.
The purchase values Innovare at approximately $11.5m, which represents the current value of the company’s existing licencing agreements with Innovare.
The agreement is expected to close in Q2 2022, subject to the satisfaction of certain conditions precedent, including TSX Venture Exchange approval.
“The acquisition will place the company in a strong competitive position in an industry dominated by producing facilities based on conventional 1950s and older technology,” said Mike Ferguson, President and CEO of Gensource.
“With Innovare’s technology integrated into our business, we will have total control over production processes at the Tugaske Project and future projects we anticipate rolling out in Saskatchewan and globally, while also anticipating a reduction in life of mine costs.”
“This transaction will strengthen Gensource’s differentiated market position as a near term potash producer into a market that continues to see global supply challenges and is in need of a structural change if we are to support the world’s growing agricultural requirement for environmentally sustainable potash.”