CET signs Heads of Terms with Spirax Sarco

10th September 2014

CORAC GROUP PLC

("Corac" or the "Group")

Corac Energy Technologies signs Heads of Terms for commercial manufacturing

Corac Energy Technologies (CET) has signed a Heads of Terms agreement with Spirax-Sarco Engineering plc (Spirax Sarco) for Spirax Sarco to manufacture steam microturbines and compressors following successful trials of prototype systems built under a joint development project.

Spirax-Sarco Engineering plc is the world leader in both steam system management and peristaltic pumping. Spirax Sarco provides a broad range of fluid control products, engineered packages, site services, and systems expertise for its diverse range of over 100,000 industrial and institutional customers. Spirax Sarco helps its customers to increase productivity, reduce energy costs and emissions, reduce water usage, improve product quality and enhance the safety of their operations.

Under a joint development agreement between the two companies, announced 15 November 2012, prototype expanders and compressors were designed and built by CET. Following an extensive joint testing programme, the first of these products is now ready to move into manufacturing. The products will be manufactured, distributed and sold by Spirax Sarco.

The innovative new products will deliver significant benefits to customers, helping them to increase the efficiency of their industrial processes through better management of energy and waste heat. 

The agreement sets out the principles within which a manufacturing and production agreement (MPA) will be negotiated. The MPA will enable licence of Corac IP to Spirax Sarco to manufacture the products developed under the initial joint development contract. The agreement establishes a basis on which CET designed and developed products will be commercialised under a licence and technical support arrangement.

Nick Anderson, Group Chief Executive of Spirax-Sarco Engineering plc stated:

"Spirax Sarco offers an extensive array of products and services through which we help our customers to meet their sustainability targets. The products developed under the initial joint development project will form part of our strategically important focus on Thermal Energy Management solutions, through which Spirax Sarco is helping its customers to save energy and reduce their energy bills. The innovative products that have been created through joint development with Corac will provide good commercial opportunities for both companies."

Corac Group Chief Executive Phil Cartmell commented:

"We are delighted to reach an agreement with Spirax Sarco to move towards the first commercial manufacturing of CET's technologies. This is a big step forward for the company and recognises the potential for these products on the global stage.

"It also rewards the hard work on both sides to bring such an innovative development project to this stage in less than two years. We look forward to building a long-term collaboration with Spirax Sarco and to the commercial gains that it will bring us both."

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NOTES TO EDITORS

Corac is a group of innovative UK based engineering companies, active in energy and environmental technologies. Group companies produce valuable solutions in compression systems, atmosphere management and heat exchangers for government, energy and industrial users. Corac Group shares have been traded on the London Alternative Investment Market (AIM) since July 2001.