RAM Active Media plc ("RAM" or the "Company"), the investor in Digital out of Home ('DOOH') media, communications and Intellectual Property, is pleased to announce, following its announcement on 7 December 2011, that its operating subsidiary, TrainFX Limited ("TrainFX") has entered into a binding agreement with CETEC Europe Limited ("CET") to establish a joint venture with respect of its rail industry information systems business.
Under the terms of the contract, CET will subscribe £500,000 in cash for shares in a new joint venture company (JVCo). Train FX has agreed to transfer part of its business and assets to the JVCo in exchange for a 30% equity interest plus £33,000 in cash.
In addition, on the terms of a business services agreement entered into between Train FX and the JVCo , Train FX will receive a royalty of 5% of TrainFX sales in the UK, 1% of sales in China, and 2% of sales to the rest of the world for a period of four years of the date of the transaction.
RAM has agreed that once Train FX has received at least £1,900,000 of income by way of royalties or distributions from the JVCo, that it will reduce its shareholding to in the JVCo to 26% at the option of CET.
Train FX will be renamed RAM Tech Limited as part of the transaction and the JVCo will trade under the name TrainFX Limited.
Changzhou Evergreen Transport Technology (CETT) is a subsidiary of the $200M Changzhou Evergreen Group (CEG). CEG is a China based manufacturer of rail and metro products, supplying several of the major European and Chinese train manufacturers, through the company's Global Rail Division. TrainFX will form a subsidiary of the Group's European Division, through CETEC Europe Ltd.
The TrainFX portfolio fully complements the current CETT activities as a well-established provider of full interiors and rail equipment to rail fleets across the world, including the UK, France, Germany, Spain, China, Saudi Arabia, Poland and North America. TrainFX will also gain access to a global supply chain, organisational support and global reach of a major international organisation, operating in several industries.
As part of the agreement, CET will use all reasonable endeavours and act in good faith to provide RAM with full access to its contracts on the digital out of home and transit media market in China and the rest of the World, with a view to promoting RAM as its preferred partner in relation to digital media products. RAM currently operates media advertising and sales activities in the UK digital out of home market and is the largest Shopping Mall landscape screen provider broadcasting to an annual footfall of over 650m.
RAM Chairman, Tim Baldwin, said: "The Joint Venture partnership will accelerate the global reach of the technology contained within Train FX's portfolio. CET's knowledge of and operations in major world markets will advance the development of the company far quicker than we could have done on our own. We are confident this joint venture will be a great success and look forward to sharing in its benefits".
For further information please call:
Tim Baldwin RAM Active Media plc 0207 518 4303
Sandy Jamieson Libertas Capital Corporate Finance Limited 0207 569 9650
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