9th Mar 2006 10:46
Petards Group PLC09 March 2006 Petards Group plc ("Petards" or "the Group") Acquisition of EIMC Petards, the AIM listed developer of advanced surveillance systems, announcesthat it has acquired the entire share capital of European InnovationManufacturing Centre Limited ("EIMC") for a maximum total consideration of £1.8million. EIMC is a specialist supplier of a range of IR (InfraRed) and daylight cameratechnologies that underpin many video and ANPR (Automatic Number PlateRecognition) systems in the UK and Europe and are used in approved systems inthe emerging North American markets. HIGHLIGHTS • Petards to acquire EIMC for an initial payment of £225,000 comprisingof £25,000 in cash and the balance in 14,285,714 new ordinary shares at 1.4p ("the Initial Consideration Shares"). An additional payment of up to £75,000 incash will be made on a performance-related basis for the year ending 31 March2006. • Further payments up to a total aggregate maximum of £1,500,000 will bemade on a performance-related basis for the period ending 31 December 2006 andthe year ending 31 December 2007. An example of the operation of the earn-outmechanism is set out below. • Acquisition of leading edge technology in rapidly expanding specialistcamera and surveillance equipment markets. • Strengthens the Group's position within its existing client base andadds new opportunities in the global law enforcement, security service andcommercial sectors. Petards will build on the existing relationships that EIMC has established tosupply ANPR solutions worldwide. The Group will have the opportunity to expandthese systems by incorporating its core range of digital recording, storage andcontrol room solutions (including UVMSTM and Advantage Net+). The acquisition will also enable Petards to accelerate the further developmentof its market leading Provida range of digital video and speed enforcementsystems. New systems will meet the growing demands for greater in-car computerintegration and digital storage. The use of UVMSTM as the management tool forthe storage of high volumes of digital evidence will provide further synergiesand sales opportunities. EIMC's special-vehicle installation capability also offers Petards an in-housefacility whereby both EIMC and Petards systems will be fitted to a wide varietyof covert and overt surveillance vehicles used by security agencies. Application will be made for the Initial Consideration Shares to be admitted totrading on AIM and such admission is expected to become effective on 16 March2006. The Initial Consideration Shares will rank pari passu with the existingordinary shares of the Company. Further payments up to a total aggregate maximum of £1,500,000 will be made on aperformance-related basis for the ten months ending 31 December 2006 and theyear ending 31 December 2007. By way of illustration, in the event thatoperating profits of EIMC reach £500,000 for the period ending 31 December 2006,then the further payment for that period will be £133,500 and if they reach£660,000 in the year ending 31 December 2007, the further payment for thatperiod will be £175,500. The additional consideration payable for the excess ofoperating profits above these amounts will be paid at a multiple of 1.5 times upto the maximum. These further payments will be satisfied by either the issue ofloan notes or new Petards shares at the prevailing market price. The vendors ofEIMC may elect whether to opt for loan notes or new Petards Shares for the first£133,500 of the further payment in respect of 2006 and the first £175,000 inrespect of 2007. Petards have the option as to whether the balance of anyfurther payments is satisfied by way of loan notes or new Petards shares. EIMC was founded in 2001 and in the year ended 31st March 2005 it made a profitafter tax of £21,000 on sales of £885,000. At 31st March 2005 it had net assetsof £22,000. David Hayes, Chief Executive of Petards said: "I'm delighted that we have beenable to bring EIMC within the Petards Group. Its experience of cameratechnology for ANPR and other applications, linked with Petards' expertisewithin mobile and fixed surveillance applications provides a powerfulcombination to further Petards global expansion." Peter Henden, founder of EIMC and Head of Research said: "By being part ofPetards we will be able to do justice to the sales potential of our innovativesolutions. The opportunity to increase our market reach was a key factor in ourdecision to join Petards. We are looking forward to realising the significantpotential of the business as part of a larger group." For further information: Paul McManus, Binns & Co - Tel: 020 7786 9600, Mob: 07980 541 893 Andy Wonnacott, Finance Director, Petards Group plc - Tel: 01932 788288 www.eimc.net www.petards.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Petards