18 Jul 2008 12:30
18 July 2008
Origo Sino-India PLC
Investment in HaloSource
Origo Sino-India Plc ("Origo" or the "Company") (LSE: OSI) is pleased to announce a new investment in conjunction with Origo Resource Partners Limited ("ORP" or "the Fund"), in HaloSource, Inc. ("HaloSource" or "the group"), a clean technology group focused on water treatment and anti microbial fabric treatment.
Origo and ORP have entered into an agreement to acquire a combined equity stake of approximately 11% (on a fully diluted basis) in HaloSource for an investment of US$10 million, through the issue of new HaloSource shares. Origo and ORP will also, as part of the investment, receive warrants on a 1 for 4 basis, to subscribe for further equity at the subscription price. The investment, which is being satisfied through the respective existing cash resources of OSI and ORP, will be split on a 30:70 basis between the Company and the Fund in accordance with the pre-existing co-investment agreement between the two entities. Origo and ORP are joined in this funding round by existing investors, including Unilever Technology Ventures, a fund managed by Physic Ventures. Under the terms of the agreement, Origo and ORP will together be entitled to appoint one director to the board of HaloSource.
Founded in 1998, HaloSource has invented, developed and commercialised technologies used in water purification, water clarification and antimicrobial textile coatings used to kill germs and viruses on towelling, bed linen and clothing. Based on technology developed at Auburn University and the University of California, HaloSource has a strong base of intellectual property and know-how, with over 100 global patents granted or pending. HaloSource has its head quarters in Seattle with manufacturing facilities in Raymond (near Seattle), Bangalore and a newly commissioned factory in Shanghai. HaloSource's products are branded and trademarked and the group has a rapidly growing customer list drawn from leading global businesses.
For the year ended 31 December 2007, HaloSource reported a revenue increase from continuing operations of 30%, generated through organic growth. During this development period Halosource did not generate a net profit. The group's highest growth revenue stream is based on water purification at point of use, at a price point which makes the technology available to lower income households in geographies such as China and India - where a shortage of drinking water and water related diseases are serious health issues. Origo intends to assist HaloSource, specifically in extending channels to market and advising on operational issues in these territories. The directors of Origo believe HaloSource's proven business model and management team will enable it to grow significantly as demand for its three distinct businesses increases throughout the developing and the developed world.
The transaction is subject to normal closing conditions for a transaction of this type and is expected to complete later this month.
Commenting on today's announcement Chris Rynning, CEO of Origo, said:
"We continue to identify opportunities across a series of fast-growing sectors including the water purification & treatment industry, which will help to meet rapidly growing demand in China and India."
"Our investment in HaloSource underlines our focus on working with fast-growing companies where our business development expertise can help to bring about a step change in performance. We look forward to working with the highly experienced management team that HaloSource has assembled to capture the significant growth opportunities available."
ENDS
Further information:
| Origo Sino-India PLC Chris Rynning chris@origoplc.com | +86 1390 124 6417 |
| Nominated Adviser: Smith & Williamson Corporate Finance Limited Azhic Basirov | +44 (0)20 7131 4000 |
| Broker: Liberum Capital Limited Simon Atkinson | +44 (0)20 3100 2223 |
| Public Relations: Aura Financial Michael Oke/Andy Mills | +44 (0)20 7321 0000 |
Notes to editors:
HaloSource
HaloSource has three businesses, each with distinct brands:
"HaloPure" - kills all germs and bacteria to provide safe drinking water. Aimed at both developing and developed economies in a variety of applications.
"SeaKlear" - provides germ-free, clear water for swimming pools, water parks and other recreational water environments - and "StormKlear" - cleaning of industrial and storm water.
"HaloShield" - an enabling germ and virus-killing technology that has application on toweling products, applications in medical textiles, and military applications.
Origo Sino-India PLC ("Origo"):
Origo is an established private equity investor and strategic consultancy business, which provides its shareholders with exposure to growth opportunities and private equity returns in China and India.
Origo's business model is to generate capital gains from private equity investment in growth companies from which it also generates fees for consultancy services related to further fundraisings, M&A and strategic development.
Origo is aligned with two major financial institutions which provide a source of high quality deal flow. In China, Origo works closely with China Equity, a leading private equity firm, whose chief executive is a member of Origo's board. In India, Origo has entered into a memorandum of understanding with SBI Capital Markets, one of the longest established companies in the Indian Capital Markets. A former chairman of the State Bank of India is also a member of the board of Origo.
Origo also signed a memorandum of understanding with GLG Partners LP in March 2008 to explore asset management and advisory opportunities in China, India and other markets. Origo and GLG Partners LP have also entered into an agreement whereby Origo will provide GLG Partners LP research services for a period of three years for a fee of £3 million.
On its admission to AIM in December 2006 Origo raised GBP12.8 million gross of new money via a placing of 25,673,238 Ordinary Shares at 50 pence per share. Each ordinary share carried a warrant exercisable at 55p.
Origo has a significant portfolio of investments in a range of industrial sectors, including mobile applications and content; natural resources; art and paper products; furniture; food and beverage; online gaming; anti-virus software; and bio energy.