29th Sep 2006 07:02
Sondex PLC29 September 2006 Friday 29th September 2006 Sondex plc ("Sondex" or the "Group") Acquisition of Ultima Labs Inc Sondex plc announces the acquisition of Ultima Labs Inc ("Ultima Labs"), aprivate Houston based technology development company with a range of IP andproducts related to Logging While Drilling ("LWD") and Wireline applications forthe oilfield service industry, for a consideration of up to US$9.225 million(£4.855 million), including sales related earn-out. Ultima Labs is a technology development company based in Houston, USA. Theprimary product that has been developed and is in the process of beingcommercialised is for LWD involving multiple depth resistivity measurements ofthe rock formations and their fluid content in order to asses the potential foroil or gas production. This technology is a complementary, next step,measurement for the existing LWD tools provided by Sondex drilling division. Ultima Labs have a Memorandum of Understanding to provide these products, withan initial order to the value of $4.5 million, to a Chinese company that is alsoan existing customer of Sondex. The management of Ultima, who have extensive experience in technologydevelopment for both wireline and drilling applications will remain with thebusiness and participate in the integration of the technology and development offuture product lines. Consideration The maximum consideration of US$9.225 million (£4.855 million) will be settledas follows: 1. At completion a payment in cash of US$1.65 million (£0.87million); 2. On each of the first and second anniversaries of completiona cash payment of US$1.5 million (£0.79 million); 3. A payment of up to US$2.25 million (£1.18 million)depending on Ultima Labs achieving certain milestones related to the developmentand sales of Ultima's CPR Tool, such amount to be satisfied by the issue of upto 415,584 ordinary shares in Sondex; and 4. Earn-out payments of up to an aggregate maximum of US$2.325million (£1.224 million) paid annually in cash over a maximum of five years as aroyalty from sales of specified Ultima products. Funding for the maximum consideration and projected working capital requirementshas been arranged through an extension to the existing bank facilities with theBank of Scotland. * using an exchange rate of £1: $1.9 Martin Perry, Chief Executive of Sondex, commented: "This acquisition is an excellent strategic fit with Sondex's drilling division. Ultima Labs have an innovative highly regarded product range with strong IPprotection as well as an extremely skilled and experienced development team,they will add to the range of high technology products that we can offer to ourexisting and new clients across the world." For further information, please contact:Sondex Tel: 01252 862 200Martin Perry (Chief Executive)Chris Wilks (Finance Director) Investec Tel: 020 7597 5000James Grace / Patrick Robb College Hill Tel: 020 7457 2020Nick Elwes / Paddy Blewer www.sondex.com For further information about Ultima Labs please visit: www.ultimalabs.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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