Getech Grp Regulatory News (GTC)

9 Dec 2008 07:51



GETECH Group plc 

("GETECH" or the "Company")

Acquisition and Placing

GETECH, a leading oil services business specialising in the provision of data, studies and interpretation services to the oil and mining exploration sectors, announces the acquisition of the assets of Lisle Gravity Inc ("Lisle") (the "Acquisition"), subject only to payment of the initial consideration. In addition, GETECH announces the conditional completion of a placing of 1,530,461 ordinary shares at a price of 26p to support the acquisition (the "Placing"), subject to completion of the Acquisition and admission of the shares, which are the subject of the Placing, to trading on AIM. 

The Placing, which was oversubscribed, will raise £400,000 before expenses.

Acquisition

Lisle, a company based in Denver, Colorado, owns a substantial proprietary gravity database for the USA. It also holds magnetic and magneto-telluric data for the USA. GETECH has today acquired the assets of Lisle including the data holdings, hardware, and the name "Lisle Gravity". Lisle currently markets and licenses its data in the USA in much the same way that GETECH licenses data internationally.

In the year ended 31 December 2007, Lisle returned gross revenue of $1,630,000 and profit before tax of $550,000 after owner's drawings.

A summary of the consideration payments, which will be satisfied in cash, partly from the Company's existing reserves, and partly through the Placing for cash, are set out below:

Initial payment of $1,700,000 to be paid partly on completion ($1,400,000) and partly in March 2009 ($300,000) with a further consideration of $100,000 payable in the event that a further condition, as set out in the agreement, is satisfied;

Deferred payments calculated as 15% of net sales (net sales being gross revenue less commissions and revenue shares ("Net Sales")) up to $1,000,000 each year, and 35% of Net Sales thereafter, for the first three years after completion of the Acquisition;

The present owner, George Lisle, will act as a consultant to GETECH for the first year on a part time basis for a fee of $110,000; and

GETECH will pay a retainer of $25,000 in each of the years 2011, 2012, 2013 and 2014 to Lisle, pursuant to which Lisle will endeavour to make George Lisle available for advice during that period.

Derek Fairhead, Executive Chairman, said "Lisle Gravity was founded in 1971 and has established its reputation by compiling and marketing what is arguably the largest and most comprehensive commercially available gravity database in the US. This acquisition maintains GETECH's position as a major global provider of such data and is an excellent fit with our core business. The acquisition provides a new business opportunity to expand our marketing and integrated interpretation services into what is an already dynamic US domestic market."

Given the intangible nature of the majority of the assets being acquired, their written down value, recorded at December 2007, was nil. The tangible assets were valued, at the same date, at approximately $50,000.

A further announcement will be made when the Acquisition completes.

Placing

The Company also confirms today that it has completed a Placing, conditional on completion of the Acquisition and admission of the shares, which are the subject of the Placing, to trading on AIM. The Placing, by WH Ireland Limited, will raise approximately £400,000 before expenses through the issue of 1,530,461 new ordinary shares of £0.0025 each ('Placing Shares') at 26p per share. 

The funds will be used by the Company in the Acquisition. The Placing is conditional on the completion of the Acquisition, and accordingly a further announcement will be made when the Placing completes. Application will be made for the Placing Shares to be admitted to trading on AIM.

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