6th Aug 2007 08:01
Press Release 6 August 2007 Nviro Cleantech plc (“Nviro Cleantech†or “the Groupâ€) Nviro Cleantech joins AIM Nviro Cleantech plc (AIM:NVR), which aims to commercialise “clean†technologies,today announces the commencement of dealings of its Ordinary Shares on AIM. GrantThornton Corporate Finance is acting as Nominated Adviser to Nviro Cleantech plcand Fairfax I.S. PLC is acting as Lead Financial Adviser and Broker. The stock marketEPIC is NVR. Placing and Admission Statistics Placing Price 63p Number of New Ordinary Shares to be issued under the Placing 11,904,762 Number of Existing Ordinary Shares in Issue 31,916,199 Number of Ordinary Shares in issue on Admission 43,820,961 Percentage of the enlarged issued share capital being subject to the Placing 27.17 Market capitalisation following the Placing at the Placing Price £27.6 million Gross proceeds of the Placing £7.5 million Net proceeds to be received by the Company (exclusive of applicable VAT) £6.53 million Reasons for the Placing and Admission The Group has raised £7.5 million (£6.53 million net of expenses and applicable VAT)for working capital principally to enable it to further finance and develop its businessstrategy. Application of funds £m Vertus RTP Technology 4.04 Other technologies 1.39 Corporate Working Capital 1.10 Cost of Placing & Admission to AIM 0.97 Total 7.50 Chris Every, Chief Executive Officer of Nviro Cleantech, said: “We are pleased thatthe flotation has been completed successfully and are delighted with the supportfrom our new shareholders. The Placing will enable us to develop our business strategyand to further finance our portfolio of clean technologies, in particular our VertusRTP technology. “We are confident that Nviro’s technology portfolio and flexible business model givesus the necessary agility to exploit the shifting and fast growing global market forclean technologies, which has been conservatively estimated to reach US$800 billionby 2015.†For further information, please contact: Nviro Cleantech plc Chris Every, Chief Executive Officer Tel: +44 (0) 20 7451 2473 [email protected] www.nvirocleantech.com Grant Thornton Corporate Finance - Nominated Adviser Fiona Owen [email protected] Troy MacDonald Tel: +44 (0) 20 7383 5100 [email protected] www.grantthornton.co.uk Fairfax I.S. PLC Lead Financial Adviser and Broker Ewan Leggat, Corporate Finance Tel: +44 (0) 20 7598 5368 [email protected] www.fairfaxplc.com Laura Littley, Corporate Finance [email protected] Media enquiries: Abchurch Justin Heath Tel: +44 (0) 20 7398 7781 [email protected] Georgina Bonham Tel: +44 (0) 20 7398 7715 [email protected] www.abchurch-group.com Information about the Group Group Strategy Nviro Cleantech invests in and commercialises Clean Technologies applying a businessmodel that is common to each project. Chosen technologies will have achieved laboratoryscale proof of principle or be more advanced. The investment required for developmentmust demonstrate the potential to generate significant incremental value throughcommercialisation to form the foundation of a business within a maximum of thirtysix months from the initial investment. Projects must also offer significant globalmarket opportunity and have access to the target market without requiring the buildingof entirely new penetration structures. By selecting projects with a range of developmentstatus the Company provides investors with short term to market lead project andlonger term, supporting opportunities for success. The objective is to develop eachproject to the point it is capable of being a self sustaining business and to selectthe most appropriate exit route for it. The Company is concentrating its resourceson its primary technology, Vertus RTP. The remainder of the portfolio will be progressedafter Vertus RTP has achieved clear momentum in its business model. The Group willcontinue to provide management and technical support to projects as they mature,maintaining a small core management team and establishing each project as a subsidiaryas commercialisation requires it. History and Background Nviro Cleantech Limited was established in October 2005 with the objective of collectingtogether a number of technology projects in which Nviro Cleantech Limited would investthe necessary capital, management team and administrative resources to commercialisethe technologies. The technologies were sourced from small private developers anduniversities in the UK and Europe. Over the following twelve months a process ofreview of more than seventy technologies was undertaken. These technologies wereconsidered against the Company’s key criteria for successful selection. Eventuallya short list of eight projects was complied from which the current five technologiesin the portfolio were selected. Vertus RTP was selected as the primary technology,which will be the focus of the Company’s resources. The portfolio includes technologies that have been known to the Management Team fora number of years and others that have been selected for their synergy with the othertechnologies. After selection the individual technologies were reviewed in detailto build, with their teams, a project development plan, IPR strategy and budgetstogether with resource requirements. A detailed negotiation for the establishmentof license and commercialisation rights was completed with the various stakeholdersin the IPR. A phased development programme was carried out between September 2006and March 2007. Adding to the initial start-up investment, an external funding roundwas closed in November 2006 with further funds sought in April 2007 resulting ina total investment of £13 million in the technologies since their inception. Eachof the technologies has the potential to be commercialised over the next 36 monthswith, to date, progress having been achieved beyond the proof of principle phaseof development to commercialisation. The Business The Group is focused on commercialising Clean Technologies, such as renewable energy,waste recycling, emissions control, and air quality monitoring to benefit the globalenvironment. The concept of Clean Technologies embraces a diverse range of technologies,services, and processes that are inherently designed to provide superior environmentalperformance at lower costs and greatly reduce or even eliminate adverse environmentalimpacts. It is conservatively estimated that the global market for renewable energy,waste treatment and management and other Clean Technologies will reach $800 billionby 2010 (Cleantech Venture Network Venture Monitor, Volume 5 Q1 2006). Further sub-segmentingthe market, the global clean energy segment is expected to see spending increaserapidly from $39.9 billion in 2005 to $167.2 billion in 2015. The Group seeks promising, early stage Clean Technologies with global opportunitiesfrom University or small boutique start-ups. The Group provides the necessary capital,management and technical skills and resources to assist in bringing these technologiesto market. The Group invests in early-stage technology and In-licenses the technologytogether with rights to use and develop the IPR. This gives the Group an investmentin new technology when the cost of IPR is at a relatively low point and the potentialinvestment return is relatively high. Nviro then drives the technology through anaccelerated development programme to obtain marketable products, with the intentionof optimising return on investment for Shareholders. Market access can take a variety of forms including sales, service contracts, managedservice agreements or Out-licensing. The Group’s model includes risk minimisationmeasures, optimising time to market, maximising capital deployment efficiency andthe potential return for Shareholders. Cleantech Industry Clean Technologies are part of an industrial revolution that creates innovationsthat reduce pollution, emissions, or waste. Some of these technologies are not onlyenvironmentally beneficial, but are also more cost effective. The Directors believethat the collective industry is reaching an Inflection Point, based on convergenttrends in society (e.g. fears of Global Warming), economic factors (e.g., the priceof oil), technological factors (e.g. hybrid cars that can be produced for roughlythe same cost as traditional vehicles), and geo-political factors (e.g. approximately60 per cent. of the global oil supply is exported from the Middle East). These trendsare forcing many countries to examine new technologies, more stringent regulationsand consumer behaviour to use innovative solutions to overcome the global environmentalchallenges faced today. Market Size and Growth The Clean Technology market has only recently become a recognised sector for investmentand development. The industry is seeing a significant increase in investment, with2006 investment expected to top $3 billion compared with $1.5 billion in 2005 accordingto Cleantech Venture Network. Investment growth in the development of Clean Technologiesis matched by an active M&A market which provides an exit route for new technologies. The Directors believe that the appetite for innovative competitive technologiescannot be met from internal research resources, forcing a proactive competitive acquisitionmarket to arise. Large companies, such as General Electric (GE), have embraced theCleantech trend. GE has made a strategic thrust into the industry through its global“Eco-magination†initiative which recently surpassed the $10 billion in annual revenuesgenerated from Clean Technologies. The global Cleantech Industry also benefits from public and political recognitionof the need to adopt emerging science and technology. Agreements such as the KyotoTreaty and the US Clean Air Act are just two examples of many agreements and regulationsthat are driving such technical innovation. Sustainable development is an ethicallymotivated strategy of meeting our needs without compromising the ability of our descendants’to meet their needs. It is the Director’s opinion that the Cleantech Industry is at an Inflection Pointowing to the convergence of several trends â€" demand from consumers for new technologyto reduce environmental harm, international agreements and tighter government regulationsdriving innovation and spending, and visible political unrest in the oil-rich MiddleEast. The Directors believe that the Group will benefit from these factors. Portfolio Overview The Directors have selected and In-licensed a portfolio of technologies for theirability to solve significant global environmental issues cost effectively. VertusRTP was selected as the primary technology, as it is believed by the Directors tohave the greatest market potential. The following table provides an overview ofthe Group’s portfolio: Technology Description Time to market Market Drivers LEAD TECHNOLOGY Vertus RTP Technology (patented in the US) to clean low quality coal and biomass to producehigh-grade, Anthracite like fuel. JV formed with Balama Prima in China for two units and in advanced discussions witha number of parties with a view to procuring sales of Vertus RTP units in the USand India. Increasing environmental pressures combined with increasing energy demands and therelative abundance of coal as a fuel source for both existing and new coal-firedgeneration. SECONDARY TECHNOLOGY Microrelease Patent pending technology to recycle MDF and particle board into a high qualityreusable wood fibre. Potential to be brought to market within 24 months. Heavy use of MDF products and the environmental challenge and expense of MDF wastedisposal. FOLLOW ON TECHNOLOGIES Carbon Co-burner Laser based ignition technology, enabling the firing of clean and energy efficientcarbon powder, as a co-burning fuel in existing heat and power boilers and steamplants. The carbon powder can be derived from renewable sources. Potential to be brought to market within 24 months. Increasing environmental regulation of boilers in the United States, the UnitedKingdom, the EU and other countries. Organotect Lab on a chip Field-portable Micro-fluidics plasma detection system allowing the rapid analysisof hazardous chemicals in the air with sensitivity that is competitive with a laboratory-basedinstrument. Potential to be brought to market within 30 to 36 months. Growing chemical sensing industry driven by growth of homeland security initiatives. Laseair Clean air technology that utilises a low energy source to clean and decontaminateair. Its performance surpasses existing passive filtration methodologies. Potential to be brought to market within 30 months. Growing indoor air quality industry driven by increased concerns regarding buildingenvironmental safety. Directors and Management Team The Board includes three executive and four non-executive directors. Details of theirroles and their background are as follows: James Dickson Leach (“Dintyâ€), Non-Executive Chairman James Dickson Leach spent most of his career in Hong Kong working with the Kadooriefamily. During this time he was exposed to many privately held businesses and hasbeen involved with their associated publicly listed corporations, China Light & PowerHoldings (“CLPâ€), Hong Kong and Shanghai Hotels, and Tai Ping Carpets. He was closelyinvolved, from the inception, with CLP’s international operations in Thailand, Indiaand Australasia. Since his retirement in 2006, he has remained on several boardsincluding CLP, HK Aircraft Engineering and China Construction Bank (Asia) (formerlyknown as Bank of America (Asia)). In the early 1980s James ran a venture capitalcompany, Zink Industries Limited, which invested in oilfield equipment manufacturingthrough Drexel Oilfield Services Limited (latterly Varco Inc.). He is a CharteredAccountant and has a MBA from Columbia University. Christopher Every, Chief Executive Officer Christopher Every comes from a background in sales and marketing at board level andnew technology development in engineered and technical products for companies includingWiggins Teape Paper, Courtauld International Marine Paints plc, National Starch Corporation,and Williams Holdings plc. He moved from corporate management to consulting twentyyears ago and has worked with major organisations including Michelin, Powergen plc,TXU Energy and national and local government. He also has extensive experience inbuilding new businesses including Enhance Biotech Inc. and Brimac Ltd. Most recently,Christopher served as the chief executive officer of Enhance Biotech Inc. a biotechstart-up and as an active board member for Brimac Ltd, an environmental businessfocused on manufacture and application of carbon for filtration in the sugar refiningand water treatment fields. Dr. Mustapha Omar, Commercial Director Dr. Mustapha Omar has extensive experience in capital markets, primarily in the fieldof investment analysis, and latterly in corporate broking. Prior to his role withFairfax I.S. PLC, as head of research, he served ten years at Collins Stewart Limited,where he was one of the original eighteen partners and also head of research forlarge capitalisation companies. His capital markets career commenced at Williamsde Broe Limited in 1989, where he was an analyst covering the capital goods sector. In 2000, Mustapha switched his sector coverage to embrace the technology and telecomssectors. He has four years industrial experience as a senior research scientistwith Taylor Woodrow plc and IDM Electronics Limited. Mustapha has a first classdegree in mechanical engineering with mathematics and a PhD in materials scienceboth from the University of Reading. He is the author of five scientific publicationsin international journals. Peter Rugg, Chief Financial Officer Peter Rugg has extensive experience in corporate banking, having worked internationallyin mergers and acquisitions, capital markets and venture funding. Peter also hasexperience in major public corporations including serving as chief financial officerof Triton Energy Limited. In recent years he has consulted to technology companiesin the early growth phase with strategic and financial development support acrossa wide range of industries and territories globally, as a senior partner with TatumPartners. Prior to his role with Triton, Peter was vice president of corporate financedivision for JP Morgan leading relationships with ExxonMobil, Shell Oil, and BP Amoco. Peter has a BA in Liberal Arts and a BSc in Industrial Engineering both from ColumbiaUniversity in New York. Libby Cooper, Non-Executive Director Libby Cooper is an experienced corporate lawyer, with a unique focus in waste managementand environmental law. She currently holds the post of European Legal Counsel atGolder Associates, international environmental and engineering specialists. Shewas previously an associate at Clarkslegal and a leading member of their environmentaland projects law team. Prior to Clarkslegal, she was the company secretary for SITAHoldings UK Ltd, where she was responsible for all legal affairs of this leadingUK waste management and recycler. She helped strategically guide the company throughall aspects of environmental law, compliance, contract procurement and management,and was responsible for negotiations and communications with the Environment Agencyat a national level in the UK. Prior to SITA Holdings UK, Libby was the company secretaryand director for the Initial Services Division of BET Plc (now Rentokil Plc), whereshe was responsible for all legal matters affecting the company’s operations. Libbybegan her career at Shanks and McEwan (Southern) Limited, a major waste managementfirm in the UK, where she became company secretary responsible for human resourcesand legal functions. Duncan Sedgwick, Non-Executive Director Duncan Sedgwick is a proven leader in the energy sector. He is currently the chiefexecutive officer of the Energy Retail Association (“ERAâ€) in the United Kingdom. He has helped to establish ERA from the ground up, becoming a key spokesman forthe sector in time of unprecedented price rises. He has delivered major operationalperformance improvements in the areas of selling, customer transfer and billing withinmember organisations. Prior to his role with the ERA, Duncan held various positionswithin Powergen, the largest UK power utility. As director of business transformationat Powergen, Duncan led company wide change programmes to reduce operating costsand improve productivity. Prior to this role, he was the retail director, residentialmarkets at Powergen where he was responsible for the £1 billion consumer business. While in this role he led unprecedented growth in utility consumers, repositionedthe brand and company, and overhauled the IT infrastructure to provide for efficientand stable growth. Philip Hollobone, Non-Executive Director Philip Hollobone is currently both the Member of Parliament for the Kettering constituencyand a member of Kettering Borough Council. Before being elected to Parliament in2005, Philip spent most of his working career as a utilities industry analyst withinWilliams de Broe, Soci©t© General, and Panmure Gordon examining the performance ofwater, gas and electricity companies across the UK. Prior to his career in investmentbanking, Philip served over eight years in the Territorial Army, latterly as a paratrooper. He was educated at Oxford University, where he studied Modern History and Economics. - Ends - ENDRelated Shares:
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