RMS.L Regulatory News (RMS)

Strat Aero plc / Index: AIM / TIDM: AERO / Sector: Support Services

13 July 2016

Strat Aero plc ("Strat Aero", the "Company" or the "Group")

Completes Acquisition of UK-based Specialist Surveying Business, Geocurve

Strat Aero plc, an international aerospace company focused on the rapidly emerging Unmanned Aerial Vehicle ("UAV") sector, announces the completion of its acquisition of UK based Geocurve Limited ("Geocurve"), which specialises in the provision of UAV operated topographical surveys and inspection services to a blue chip customer base. For further details on the acquisition of Geocurve please see the Company's announcement of 30 September 2015.

Acquisition of Geocurve

Geocurve, which is based in Essex, UK, provides survey and inspection services using manned and Unmanned Aerial Vehicles ("UAVs") as well as ground and water-based systems to a broad portfolio of public and private sector clients, including the Environment Agency, Northumbrian Water, CH2M and Balfour Beatty. Geocurve was one of the first companies to be authorised by the Civil Aviation Authority to fly UAVs in congested urban areas and conduct surveys, inspections and various other projects in previously prohibited areas; and it has successfully completed a pioneering survey over the Norfolk Broads National Park using UAVs. Geocurve has all the necessary Civil Aviation Authority ("CAA") Permissions to operate UAVs nationwide, and its pilots have accumulated more than 2,000 hours of commercial flight experience.

Following the completion of the acquisition, management intends to immediately embark on a full integration of Geocurve with the Strat Aero Group. This will involve Geocurve sharing the same reporting lines and management processes with all other business units within the Group, which is expected to lower corporate costs, result in operational efficiencies and generate cross-selling opportunities. To date Geocurve customer contracts have tended to be short term in nature. The Company is focused on securing longer term annualised customer relationships and broadening its customer base. Geocurve has a strong and growing pipeline of contracts.

Iain McLure, CEO of Strat Aero plc, said "We are delighted to complete the Geocurve acquisition. Combining the Geocurve experience and assets with Strat Aero's global reach and capabilities creates a powerful platform for growth in the rapidly emerging UAV space which is already transforming everyday business practices in a wide range of commercial sectors."

Perran Bonner, Director of Unmanned Services and one of Geocurve's founders, said "We are already seeing the benefits of integration between Strat Aero and Geocurve. As an example, we have started to use Strat Aero's Digital Data Manager to deliver reporting services to our clients, and the feedback has been overwhelmingly positive."

Gary Nel, co-founder of Geocurve and Director of Engineering & Survey, said "We are very excited by the potential of integrating with Strat Aero. Not only can we share tools and experience, we can now offer clients a broader range of survey and inspection services across a much wider geographic footprint."

Acquisition Details

As outlined in the announcement of 30 September 2015, the consideration for the acquisition of Geocurve has been structured on an earn-in basis.

· The final consideration of £954,893 represents the actual sales achieved by Geocurve during the year ended 31 March 2016 of £659,384 adjusted for sales pipeline factors and profitability.

· Following an initial payment of £440,000 made in Q4 2015, which was settled 50% in cash and 50% in new ordinary shares of Strat Aero, and subsequent interim £140,000 cash payments in May and June 2016, the outstanding balance payable to the founders of Geocurve is £374,893

o It has been agreed that this final instalment is to be settled via the issue of a total of 37,489,288 new ordinary shares in the Company at 1p per share ("Consideration Shares") with 18,744,644 Consideration Shares being issued to each of the founders of Geocurve, Gary Nel and Perran Bonner

Share Capital and Related Party Transaction

Application will be made for the Consideration Shares, which will rank pari passu with the existing Ordinary Shares in the Company, to be admitted to trading on AIM ('Admission'). It is expected that Admission will become effective and dealings will commence at 7:00 a.m. on 18 July 2016.

As Mr. Nel and Mr. Bonner are directors of a subsidiary of the Company the agreement to settle the final consideration by way of issue of the Consideration Shares is classified as a related party transaction under Rule 13 of the AIM Rules.

The directors consider, having consulted with the Company's Nomad, SP Angel Corporate Finance LLP, that the settlement by way of issue of the Consideration Shares is fair and reasonable insofar as shareholders are concerned.

Following the issue of the Placing Shares, the issued share capital of the Company will consist of 262,106,046 Ordinary Shares. No shares were held in treasury at the date of this announcement. The total current voting rights in the Company are therefore 262,106,046.

The above total current voting rights number is the figure which may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the Company.

- ENDS -

For further information please visit www.strat-aero.com or contact:

Notes

Strat Aero plc is a multi-divisional international aerospace services company, focussed primarily on the provision of complete client solutions in the Unmanned Aerial System ('UAS' market), which is predicted to show exponential growth over the coming decade. Commercial and military applications in UASs are expected to be a dynamic growth sector in the aerospace industry over the next 10 years with the UAS market forecast to grow to more than US$82.1 billion between 2015 and 2025 (AUVSI Economic Report 2013) and the global airborne Intelligence, Surveillance and Reconnaissance ('ISR') market estimated to grow to US$19.23 billion by 2023.