7th Oct 2008 07:00
FOR IMMEDIATE RELEASE 7 OCTOBER 2008
CHEMRING GROUP PLC
ACQUISITION OF NON-INTRUSIVE INSPECTION TECHNOLOGY, INC.
Chemring Group PLC ("Chemring" or the "Group") announces that it has conditionally agreed to acquire the entire issued stock capital of Non-Intrusive Inspection Technology, Inc. ("NIITEK") for an initial cash consideration of $30 million (£16.9 million) plus a working capital adjustment, and deferred contingent consideration of up to $10 million (£5.6 million).
Description of the business and reasons for the acquisition
NIITEK, based in Virginia, USA, is a leading developer of robot and vehicle-mounted mine detection systems incorporating its advanced Ground Penetrating Radar (GPR) and metal detection technologies.
The acquisition of NIITEK extends Chemring's detection capability in the £2.9 billion Explosive Ordnance Disposal (EOD) market. With countermine and route clearance operations becoming increasingly important to enable modern peace-keeping, NIITEK's core R&D business has been funded by the US Army to develop its mine detection technology. Following its successful operational deployment, and around $10 million of pre-production investment from the US Army, NIITEK's first product is now ready for production. NIITEK expects to receive significant production orders for this system, and will continue to work with customers to develop further its robot-mounted and humanitarian demining systems.
In addition, NIITEK provides a strong US platform for Chemring's other EOD equipment, including disrupters, robot-mounted EOD weapon carriers, detectors, initiators and demolition stores.
Principal terms of the acquisition
The initial consideration of $30 million (£16.9 million) and deferred consideration of up to $10 million (£5.6 million) will be funded utilising existing, committed bank facilities. Payment of the deferred consideration is contingent upon NIITEK securing a significant production order and the three key members of the current management team remaining with the business for at least two years post-acquisition.
Completion is conditional upon, inter alia, the expiry of the thirty day waiting period imposed by an Exon-Florio filing in the US.
Commenting on the acquisition, David Price, Chief Executive of Chemring, said:
"We are delighted to announce the acquisition of NIITEK at a time when it is making the transition to volume production. The detection technology developed by NIITEK in the last eight years is making a revolutionary impact on the US military's capability to achieve effective route clearance during current peace-keeping operations. This incremental acquisition is another important element in the development of our Explosive Ordnance Disposal business."
For further information:
|
Dr David Price |
Chief Executive, Chemring Group PLC |
01489 881880 |
|
Paul Rayner |
Finance Director, Chemring Group PLC |
01489 881880 |
|
Rupert Pittman |
Cardew Group |
0207 930 0777 |
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