Last checked at 17 Apr 2015 07:00
For immediate release
17 April 2015
Carclo plc
("Carclo" or the "Group")
Announcement of CIT Technology Licensing Agreements
The board is pleased to announce that it has agreed to license CIT Technology's ("CIT") fine line technology ("FLT") to UniPixel Inc. ("UniPixel").
In consideration for the grant of an initial five year FLT Patent License ("Patent License") to Unipixel,
CIT will receive per annum payments of the greater of US$1.65 million or 1.67% of annual net product sales. An initial cash prepayment of US$4.67 million has been received by CIT at completion and this is non-refundable. Royalty payments in excess of the initial cash prepayment may be paid by UniPixel in either secured loan notes or cash.
CIT has also granted a royalty free Intellectual Property License ("IPR License") for UniPixel to use CIT's know-how for metal mesh touch screen technology.
UniPixel has been granted an option to extend the Patent and IPR Licenses beyond the initial five year term for a further 10 year term in exchange for annual royalty payments of 1.67% of net product sales. During this renewal term, total cumulative royalties are capped at US$8.25 million.
The maximum amount of royalties payable under both the initial and renewal agreements is capped at US$30 million (equivalent to approximately £20.2 million at completion).
Both the Patent License and the IPR License are exclusive for two years in the field of metal mesh touch screens.
CIT has also entered into a short-term coated film supply agreement with UniPixel with a latest expiry date of 31 October 2015. The agreement is expected to result in a breakeven position for CIT during this period prior to the costs associated with the likely closure of CIT's Cambridge facility, which are not expected to exceed £1.5 million.
It is intended that the non-refundable cash prepayment of US$4.67 million will be utilised to reduce Group debt after settling transaction costs and the cash costs relating to the likely closure of the Cambridge facility.
As at 30 September 2014 the carrying value of the CIT business was £5.3 million and the business reported an underlying operating loss of £0.2 million for the year ended 31 March 2014.
Since commencing its strategic review of the CIT business in October 2014, the board has considered a range of options for CIT. The board believes that the Licensing Arrangements announced today represent an optimal conclusion to that review and will enable the Group to focus on the significant future growth prospects of its two main divisions.
- ENDS -
Enquiries:
Carclo plc |
| 01924 268040 |
Chris Malley, Chief Executive |
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Robert Brooksbank, Finance Director |
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Peel Hunt LLP |
| 0207 418 8900 |
Justin Jones |
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Jock Maxwell Macdonald |
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Mike Bell |
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N+1 Singer Shaun Dobson Richard Lindley
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020 7496 3000 |
Weber Shandwick Nick Oborne Tom Jenkins |
| 020 7067 0000 |
Notes to editors
Carclo plc is a public company whose shares are quoted on the London Stock Exchange.
Carclo's strategy is to develop and expand its key manufacturing assets where there remain significant further opportunities to drive value. To enhance profit margins the group has been investing in new technologies.
Approximately three fifths of revenues are currently derived from the supply of fine tolerance, injection moulded plastic components, mainly for medical products. The balance of revenue is derived mainly from the design and supply of specialised injection moulded LED based lighting systems to the low volume premium automotive industry.