Imperial Innovations Group Regulatory News (IVO)

22 June 2011

Imperial Innovations Group plc

Automotive supplier GKN forms joint venture with EVO Electric and acquires 25% stake

Imperial Innovations Group plc (AIM: IVO, "Innovations", or "the Group"), the UK's leading technology commercialisation and investment company, announces that portfolio company EVO Electric Ltd., a pioneer in advanced electric drive solutions for the automotive sector, has formed a Joint Venture ('JV') with GKN Driveline, a division of GKN Plc (LSE:GKN), the world's leading supplier of automotive driveline systems and solutions. GKN will also acquire a 25.1% stake in EVO Electric.

GKN has invested £5m in cash and will provide engineering and commercial resources for the development of Evo Electric and the JV.

The JV will be known as GKN EVO eDrive Systems. It will manufacture and sell drive systems based on EVO's Axial Flux motor technology for use in hybrid and all-electric vehicles. The operations will be headquartered in the UK and aim to capture a share of the growing global market for hybrid and electric vehicle drive systems.

EVO Electric, already a leader in Axial Flux motor/generator technology, will supply advanced electric drive technology and associated vehicle integration expertise to the JV.

GKN Driveline, whose customers include virtually every car manufacturer in the world, is already a pioneer in the development and supply of eTransmissions and eAxles for hybrid and electric vehicles.

Susan Searle, Chief Executive Officer of Imperial Innovations, said:

"This is a very important development for EVO Electric and is a great endorsement of its technology by a leading automotive supplier. EVO Electric has already established substantial customer interest. The JV with GKN Driveline will help ensure this demand can be met.

"This development is also a good demonstration of the strength of Innovations' emerging companies and their compelling technologies."

David Latimer, CEO of EVO Electric said:

"This alliance with one of the world's leading automotive Tier One suppliers represents a major break-through for us. It will be pivotal in establishing EVO as a key player in the fast-growing global market for electric drive components."

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About Imperial Innovations (www.imperialinnovations.co.uk)

Innovations creates, builds and invests in pioneering technologies addressing global problems in healthcare, energy, engineering and the environment. It combines deep understanding of science and technology with commercial acumen and strong investment expertise.

Innovations supports scientist-entrepreneurs in the commercialisation of their ideas by:

·; leading the formation of new companies and providing facilities in the early stages;

·; providing significant investment and encouraging co-investment to accelerate the transition from R&D to products;

·; providing operational expertise; and

·; helping to recruit high-calibre industry figures and experienced entrepreneurs as executive management and Board members.

In December 2010 Innovations raised £140m to accelerate the making of, and increase the size of, investments in companies established under its existing intellectual property pipeline agreement with Imperial College London. The new funds also enable the Group to make investments in companies founded by or based on technology from the University of Oxford, the University of Cambridge and University College London. The Company works collaboratively with the spin-out equity management organisations of these universities: Oxford Spin-Out Equity Management, Cambridge Enterprise and UCL Business.

Innovations has already achieved significant success with its early investments; for example its £1.5m investment in obesity drug developer Thiakis could return up to £22m, following its sale for £100m in 2008, while the sale of Respivert, a small molecule drug discovery company, resulted in Innovations realising £9.5m, a 4.7x return on investment.

In the year to 31 July 2010, Innovations invested £14.0m in 20 ventures, helping to launch three new companies. With a technology portfolio of more than 80 companies, Innovations' most advanced assets include:

·; Circassia: Innovative vaccines for the treatment of a wide range of allergies

·; Nexeon: Advanced materials that extend the cycle life and significantly increase capacity of rechargeable batteries

·; Veryan: Stents inspired by the human vascular system

·; PsiOxus Therapeutics: Developing a pipeline of small molecule therapeutics for the treatment of wasting diseases and cancer.

·; Polytherics: Biotechnology company that applies precision chemistry to develop protein and peptide-based drugs

·; Cellmedica: Cell therapy company working on new techniques to cure human diseases based on cellular immunotherapy

·; EVO Electric: Develops and manufactures advanced electric machines, hybrid drive trains and generator sets for a wide range of transportation and mobile power applications

About EVO Electric (www.evo-electric.com)

EVO Electric Limited develops and manufactures advanced electric machines, drive systems and other integrated products for a wide range of transportation and mobile power applications. Its core competence is the development, design and integration of high torque electric motors and generators based on Axial Flux technology, an ultra efficient, low weight alternative to conventional electric machines.

EVO is backed by Imperial Innovations plc (AIM: IVO) which creates, builds and invests in pioneering technologies. Imperial Innovations supports scientist-entrepreneurs in the commercialisation of their ideas and has exclusive access to scientific and technological developments coming out of Imperial College London, one of the world's leading research institutions.

About GKN Driveline (www.gkndriveline.com)

GKN Driveline is the world's leading supplier of automotive driveline components and systems. As a global company serving the world's leading vehicle manufacturers, GKN Driveline develops, builds and supplies an extensive range of automotive driveline components - for use in the smallest ultra low-cost car to the most sophisticated premium vehicle demanding the most complex driving dynamics. 

GKN Driveline is a leading global producer of CVJ Systems, AWD Systems, TransAxle Solutions and eDrive Systems.

About GKN Group (www.gkn.com)

GKN plc is a global engineering business serving mainly the automotive, aerospace and land systems markets. It has operations in more than 30 countries, around 40,000 employees in subsidiaries and joint ventures and had sales of £5.4 billion in the year to 31 December 2010. GKN plc is listed on the London Stock Exchange (LSE: GKN).