The acquisition is to be finalised in early 2004 and will be funded by a combination of cash and new ordinary shares.

Normet Australia is the Australian distributor of mobile mining equipment produced by Normet Finland. The Heads of Agreement is subject to a number of conditions, including the finalisation of a long term distribution agreement with the Finnish manufacturer and completion of Due Diligence.

Normet Australia has annual revenues of approximately $6 million, with an average return on capital of 18.9%.

"This agreement with Normet offers a significant opportunity for the continued growth of the company's activities through the combination of Normet's quality products with SDS's Australian distribution network," said Christian Lange, chief executive officer of SDS Corporation.

Earlier this week SDS announced a placement of 30 million new ordinary shares at $0.55 per share to raise $16.5 million in a bid to cut growing debt and to boost working capital.

The bold move will increase the company's issued capital by 52.3%, and increase SDS's market capitalisation to $48 million.