A high-technology company set up by The Australian National University and UNSW Australia has been sold for $76 million (US$68 million).
The company, Canberra-based Lithicon AS, has been sold to the US-based FEI Company, a world leader in imaging technology for a range of markets, including oil and gas exploration.
ANU will receive $11 million from the sale proceeds, representing a five-fold increase in its original investment, and the University of New South Wales (UNSW) will receive $4 million.
The sale is the most significant commercial spinoff for ANU in the past decade, and underlines the strength of the University's research and partnerships with industry.
"The deal proves that Australian universities can grow a start-up company and work cooperatively with industry to build a successful business," said Professor Michael Cardew-Hall, ANU Pro-Vice Chancellor of Innovation and Advancement and Director of Lithicon AS.
"The deal also delivers a healthy return to private and corporate investors, and Lithicon's Norwegian partners."
Graham Morton, General Manager of UNSW's NewSouth Innovations said: "This is an outstanding example of co-operation between two of Australia's leading research universities moving great research into use in our society and enabling new industries to evolve."
Lithicon, previously known as Digitalcore, was originally set up in 2009 by ANU scientists in collaboration with colleagues at UNSW to develop an advanced computational approach to rapidly solving fluid behaviour in oil reservoirs. The basis of this approach is a revolutionary high-resolution 3D imaging technique. FEI also plans to develop new markets outside oil and gas using this imaging technology.
Working closely with some of the world's biggest resources companies, the technology produces digital 3D images and simulations of fluids in rock samples, giving companies crucial information to help them work out the best way to extract oil and gas.
Prior to the start-up, researchers at ANU and UNSW created a research consortium with 14 multi-national oil and gas companies to prove and develop this emerging technology. The industry engagement allowed the concept to be market tested. This demonstrates that the Australian Capital Territory can foster high-technology start-ups from fundamental research through technology transfer.
"The Lithicon story is one of taking world-class research from two of Australia's best universities and turning it into a growing business. In the process we have created a whole new industry segment based on high-value, intensive, knowledge-based services. It's exactly the sort of thing we should be doing in Australia and we need more of it," said Lithicon General Manager Dr Victor Pantano.
"ANU has been instrumental in driving the success of the company since its formation in 2009. Not only did ANU develop the technology that was the foundation of the company, it has continued to be supportive of its growth through on-going interaction with researchers and formal joint research engagements with clients from all over the world. This is a model example of university-industry interaction and the benefits it can bring."
In 2013, Digitalcore merged with Norwegian company Numerical Rocks AS, a company originally considered a major competitor.
Today, Lithicon AS employs 18 people in Canberra and markets its services to resource companies around the world.
Under the sale to FEI, an American company which specialises in manufacturing electron microscopes and microscopy workflows, ANU will receive $11 million. In addition, ANU will receive additional royalties from FEI under a licensing and development agreement.
"From a university perspective the partnership with FEI is very special and it's a tremendous opportunity for the ACT region. FEI build instruments that free scientists to explore the fundamentals, the same tools which enable industry to apply leading edge research. In connecting innovation in research with innovation in industry they are the perfect partner for ANU," said Professor Tim Senden, Deputy Director of Technology Development at the ANU Research School of Physics and Engineering.
"The sale of Lithicon exemplifies the FEI approach. By owning this emerging application they strategically support the source of the innovation - universities. Our partnership with FEI will broaden our research focus, and broaden their opportunity to develop innovative workflows for their customers."
Associate Professor Adrian Sheppard, a senior member of the scientific team at ANU, congratulated those involved in Lithicon over the sale.
"This is a great reward for a team of researchers from different disciplines who have worked together over more than a decade, often sacrificing individual career goals, to generate research outcomes of real scientific and industrial value," he said.
"It's been a privilege to be part of it and a great testament to the research environment at the School that is able to support both fundamental and applied science."
An animation showing the type of technology Lithicon uses is available (see Au21.mov for a 3D scan of a small section of rock showing where the oil and water sit within the pore).