Acquisition

RNS Number : 1354K

Sprue Aegis plc

19 September 2016

 

                                                                                                                  19 September 2016

Sprue Aegis plc 

("Sprue", the "Company" or the "Group")

Acquisition

Sprue is pleased to announce details of the acquisition of source code and development rights to software developed by Intamac Systems Limited ("Intamac") (the "Intamac Software Acquisition").

On 16 September 2016, for a total consideration of up to £2.8m in cash (excluding VAT) payable as to £1.0 million initially, together with £0.45m pre-paid licences paid to Intamac converted into consideration, and the balance over the next 12 months on the achievement of certain agreed milestones, Sprue acquired source code* and development rights to software developed by Intamac to enable its customers to connect and monitor Sprue's whole range of wireless products over the internet.

Using its patent pending technology, Sprue has the ability to use the data it collects from Connected Homes products to not only detect fires, but using an advanced algorithm, to be able to identify properties at elevated risk of experiencing a fire in the future. 

The Board believes that this is a major development for the Company as it significantly extends Sprue's technical capability and provides an opportunity to sell a wide range of internet-enabled products and services as part of its new Connected Home Strategy with the potential of recurring revenues.  In addition, based on expressions of customer interest received already, the Board is optimistic of commencing sales of internet-enabled products in Q4 2016.

As part of the transaction, Sprue has hired two of Intamac's senior software development engineers to enable it to operate and maintain the software.  Sprue has also contracted with Amazon to host its customers' data on a secure server.

Commenting on the acquisition, Graham Whitworth, Executive Chairman said: "The Intamac Software Acquisition is a critical development for the long term sales potential of the Group. 

Having our own in-house software opens up the prospect of revenue from new markets, new services and the potential of recurring revenues giving Sprue the ability to connect and monitor a vast installed network of its products over the internet. 

The Intamac Software Acquisition is for up to a total cash consideration of £2.8m (excluding VAT) and will be funded from the Group's cash reserves."

*acquired under a perpetual royalty-free licence

For further information, please contact:

Sprue Aegis plc	02477 717700
Graham Whitworth, Executive Chairman Neil Smith, Group Chief Executive John Gahan, Group Finance Director
Stockdale Securities	0207 601 6100
Tom Griffiths

Notes to Editors

About Sprue Aegis plc

Sprue's mission is to protect, save and improve our customers' lives by making innovative, leading edge technology simple and accessible.

Sprue is one of the market leaders in the European home safety products market and is now launching its own connected homes product proposition.  Its principal products are smoke alarms, CO alarms and accessories and the Group has an extensive portfolio of patented intellectual property. Sprue has patented its technology in Europe, the US and other selected territories. 

The introduction of new technologically advanced products and new safety products legislation in the UK and in Europe, and increasing levels of awareness of the dangers of smoke and CO, continue to drive sales.

Sprue manufactures CO sensors at its subsidiary, Pace Sensors for use in its CO alarms.  All other manufacturing and product assembly is outsourced to two principal third party contract manufacturers in China, one of which is Newell Brands (which acquired Jarden Corporation earlier this year) which owns 23.4% of the Company's issued share capital and Pace Technology which is independent from Newell Brands. 

Sprue enjoys a leading sales footprint in UK Retail and the UK's Fire & Rescue Services ("UK F&RS").  The Group also supplies the UK's Utility sector which includes customers such as British Gas and Scottish Gas and has a well-established but relatively low market share of the UK Trade sector.   Sprue has significant sales into Continental Europe mainly selling through a network of independently owned third party distributors.

The Group has won a number of prestigious Sunday Times Virgin Fast Track 100 Awards, which recognises the 100 fastest growing companies in the UK.  Sprue's head office is in Coventry and it has a second office in Gloucester.   Distribution centres are located in Cambridge and Gloucester.

Sprue's range of products is comprehensive, allowing the Group to tailor the range of smoke alarms, CO alarms and accessories to suit its customer needs at various price points under the following brands:

Ø  FireAngel.  A market-leading and innovative battery operated range of smoke and CO alarms principally targeted at UK Retail and UK F&RS

Ø  AngelEye.  Launched in 2012, Sprue sells smoke alarms and CO detectors principally into the French market under the AngelEye brand which has become a leading brand targeted at the DIY channel in France

Ø  SONA.  A new, low power consumption mains-powered range of smoke and heat alarm products plus CO detection that are market leading and which can be wirelessly interconnected with up to 50 products on a single network

Ø  FireAngel Pro.  Mains-powered smoke and heat alarms with a 10 year, sealed for life lithium battery back-up.  Modern design, quick fitting, tamper-proof mounting plate which locks the alarm head securely in place. 

Ø  Pace Sensors.  CO sensors used within Sprue's CO products are developed by Sprue and Pace Sensors, Sprue's wholly owned subsidiary in Canada. Pace Sensors' CO sensors are used within all FireAngel, AngelEye and Pace Sensors CO detectors and certain First Alert and Dicon branded CO detectors

Sprue is the exclusive European distributor for BRK Brands Europe Limited, (a subsidiary of Newell Brands) in Europe namely, First Alert, BRK and Dicon.  First Alert is one of the leading safety products brands in North America.

For further product information, please visit:  www.sprue.com.

 

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