De.mem Ltd (ASX:DEM), a leading provider of decentralised water and wastewater treatment solutions, has announced a binding agreement to acquire Core Chemicals Pty Ltd, a Western Australian specialty chemicals supplier servicing the gold mining sector. The acquisition, valued at approximately $3 million, aims to leverage the surging gold sector and create significant revenue synergies. De.mem designs, builds, owns and operates turnkey water and wastewater treatment systems for various industries, including mining, electronics, and food & beverage.
The acquisition of Core Chemicals is expected to bring immediate benefits, including cross-selling opportunities and customer growth. Core Chemicals currently services 18 clients in the Western Australian gold mining sector, generating approximately $4 million in revenues for the 12 months ending 30 June 2025 and pre-tax profits of $730,000. De.mem plans to offer its diversified product range to Core Chemicals’ existing clients, while Core Chemicals’ products will be offered to De.mem’s 15 existing gold mining clients. The combined entity will initially service 33 gold mines.
To fund the acquisition, De.mem completed an oversubscribed placement of $3 million at 10.5 cents per share. The placement saw strong support from existing and new shareholders, including Chairman Mr. Harry De Wit, who committed to invest $250,000. The company intends to issue the new shares utilizing its existing placement capacity under ASX Listing Rules. Mr Kit Heng Chia, operations manager and co-vendor of Core Chemicals, will join the De.mem management team.
The acquisition is anticipated to significantly increase De.mem’s pro-forma adjusted EBITDA. The combined pro-forma adjusted EBITDA for the 12 months ended 30 June 2025, is expected to be approximately $1.6 million. CEO Andreas Kroell expressed excitement about the potential of the combined businesses, highlighting the opportunity to provide a comprehensive range of water treatment products, chemicals, and services to Australian gold mining customers. The transaction is expected to be completed in late October 2025.
