BYOT.L Regulatory News (BYOT)

30 Jul 2007 07:01

Byotrol PLC30 July 2007 BYOTROL plc SIGNS JOINT VENTURE WITH CONSUMER INNOVATION EXPERTS The Directors of Byotrol plc ("Byotrol" or the "Company") are pleased toannounce the signing of a joint venture with What If Ventures, the investmentarm of What If Holdings Ltd, the holding company of the world's largestindependent consumer innovation company. The joint venture will be called Byotrol Consumer Products Limited ("BCP") andwill provide the vehicle through which the Company will pursue opportunities forits anti-microbial technology in global consumer markets. BCP will pursue asimilar strategy to Byotrol, seeking to exploit its technology by enteringlicence agreements with leading Fast Moving Consumer Goods companies ("FMCG"). The Board recognises that the skills, expense and timeframes required inlaunching new consumer products require a partner with a proven track record inthe FMCG sector. What If Ventures and its group have that track record, as wellas leading-edge global consumer insight skills, new product developmentexpertise and access to the world's major consumer product businesses. In the opinion of the Directors, BCP represents the most appropriate structureto maximise the significant opportunity presented by the consumer marketplace.The Board expects the combination of Byotrol and What If Ventures to short cutthe often lengthy and expensive new product development process within FMCGbusinesses and bring the Byotrol anti-microbial technology to the largestpossible audience at the fastest possible pace. Byotrol Consumer Products Limited Background Having identified What If Ventures as the most appropriate partner, the Boardhas worked closely with the What If Ventures team since the beginning of 2007.Considerable work has been undertaken ahead of the formation of the jointventure in order to maximise the opportunities available to it from todayonwards. During 2007, the joint venture partners have invested considerable time, moneyand resource in planning BCP, including strengthening the patent framework,developing and testing products, developing consumer insights and consumerpropositions, market scoping and target licensee development. More specifically, focus groups were conducted in the United Kingdom, UnitedStates, Europe, China and India. Within these groups the response to theByotrol anti-microbial technology was encouraging. The market opportunity Based on initial research carried out by BCP, the Byotrol anti-microbialtechnology is relevant to several multi-billion dollar global consumer markets.There are a number of specific applications within the consumer marketplace thatBCP has identified, where there is the potential to add value to productsthrough the addition of Byotrol's technology. Strategy The strategy pursued by BCP will be similar to that already in place withinByotrol, in that licensees will be sought from amongst the leading global FMCGcompanies. It is expected that BCP will receive principally a mixture ofinitial fees and on-going royalties where the Byotrol technology is used. In the next two years, BCP will focus on concluding two major types of licenseeopportunities. In particular, BCP will seek to partner with a global FMCGbusiness and will also examine opportunities with companies which have specificniche opportunities whether on a regional or global basis. Inevitably, each potential licensee will require time to assess the opportunitywhilst BCP will aim to ensure the optimum combination of licensees. In FMCGbusinesses, new product launches can typically take many years from inception toprofitability. The Directors believe however that the addition of What IfVentures' consumer insight, innovation expertise and high level corporate accesswill have a significant impact on the time taken to introduce product to themarket. The board of BCP currently expects that the company will break even withinapproximately two years. However it is not anticipated that the company's startup costs will be significant ahead of that time. The joint venture An agreement has today been signed that establishes Byotrol Consumer ProductsLimited as a 50:50 joint venture between Byotrol and What If Ventures'investment vehicle, What If Innovation Capital Nominees Ltd ("WIICN"). Bothcompanies have committed to invest £250,000 during the first year of operation. Initially, BCP will draw directly upon resources and expertise within Byotroland What If Ventures before recruiting the appropriate longer term managementteam in due course. The board of Byotrol Consumer Products will comprise David McRobbie (ChiefExecutive, Byotrol), Stephen Falder (Deputy Chairman, Byotrol), Richard Bell(Finance Director, Byotrol), David Traynor (Director, WIICN), David Allan(Director, WIICN) and Julia Hoare (Director and Company Secretary, WIICN). Inaddition, BCP will be able top draw upon the knowledge and expertise of senioradvisers with backgrounds in FMCG operations. Byotrol plc Chief Executive David McRobbie said: "This joint venture will allowus to fast track our technology to the consumer market place. What If Venturesand its group's proven track record working with FMCG companies, its network ofcontacts, its consumer knowledge and its insight and marketing expertise are aperfect fit with our scientific and technical innovation skills. "For Byotrol alone, launching a consumer brand from scratch would be a massivefinancial undertaking with significant risk attached. By partnering with What IfVentures, we are aiming to capture a substantial amount of market share withoutthe risk or cost associated with a conventional entry into the consumer marketplace. "Importantly, the establishment of this joint venture also allows us to maintaina strong focus on our core business in the healthcare, food, agriculture andindustry sectors." David Allan of What If Ventures added: "We believe Byotrol is a very significanttechnology which will deliver real innovation and significant benefits toconsumers. Our initial research show the technology has the potential to cross anumber of hygiene markets in home and personal care from anti bacterialprotection of the kitchen and bathroom to skin care and pet care. What IfVentures is ideally positioned to help develop the consumer business and helpintroduce Byotrol to some of the world's leading FMCG businesses." More information on What If Ventures can be found at: http://www.whatifinnovation.com/Ventures 30 July 2007 Enquiries: Byotrol plc 0161 277 9518Stephen Falder Deputy Chairman Richard Bell 07825 204110Finance Director Charles Stanley Securities 020 7149 6457(Nominated Adviser)Philip DaviesAnthony Noakes McCann Erickson PR 01625 822540Jim Rothnie Rawlings Financial 01756 770376John Rawlings This information is provided by RNS The company news service from the London Stock Exchange