1st Dec 2008 07:00
1 December 2008
Commoditrade Inc.
("Commoditrade" or "the Company")
Acquisition of Commodities Fund Management Business
Commoditrade Inc. (AIM: CMM), the commodities investment group, today announces the acquisition from Keiron Mathias and Chris Adams ("Sellers") of the entire issued share capital of AMCO Management Services Limited ("AMSL"), the controlling partner of AMCO Commodities LLP ("AMCO"), a commodities fund manager, for a total cash consideration of £4 million, to be satisfied as to £2 million on completion and the balance payable in 4 equal instalments of £500,000 in the course of the following 15 months. Each instalment will, however, only be paid if the assets under management of AMCO at the relevant payment date are no less than US$150 million.
Commoditrade currently enjoys the benefit of a profit share arrangement with AMCO, pursuant to which it is entitled to 75 per cent. of the annual net profits of AMCO. The acquisition of AMSL represents the final step in securing access to the entire business of AMCO and, as a consequence, this profit share arrangement will terminate on completion.
Chris Adams, one of the Sellers, is a Director of Commoditrade. Accordingly, the acquisition is deemed to be a related party transaction under the AIM Rules. The Independent Directors of Commoditrade (being those Directors other than Mr Adams), having consulted with Strand Partners Limited, the Company's nominated adviser, consider the terms of the acquisition to be fair and reasonable so far as its shareholders are concerned. Strand Partners Limited has taken into account the Independent Directors' commercial assessments of the acquisition.
Commenting, David Phipps, Chief Executive Officer, Commoditrade Inc. said
"We have had a very good working relationship with the AMCO team for two years and the acquisition of AMCO makes for an excellent fit with our previously announced strategy to diversify our product range and commodity coverage to broaden our revenue streams.
"The AMCO Fund has delivered excellent performance since it was launched in 2006 and we are very pleased that the AMCO team have agreed to join Commoditrade which will help maintain the continuity and future development of the business. At the same time this acquisition solidifies and enhances Commoditrade's bespoke offering to investors in the base metals market place and delivers another stream of earnings into the group."
Enquiries:
David Phipps, CEO
Commoditrade Inc tel: +44(0)20 7245 1100
James Harris / Angela Peace
Strand Partners Limited tel: +44(0)20 7409 3494
John Bick, Hansard Group tel: +44(0)20 7245 1100
www.commoditrade.net
Notes to editors:
Commoditrade (AIM ticker; CMM.L) was listed on AIM in 2005 as a commodities investment company and derives its revenues primarily from broking and trading in the international base metals market.
ends
Related Shares:
FOR.L