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aquisition, page-3

  1. Cei
    174 Posts.
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    Yep acquisition with funding via placement.


    10 October 2007
    INTERMOCO TO ACQUIRE ENERGY SAVING LIGHT BULB AND DISTRIBUTION COMPANIES
    The Board of Intermoco Ltd. (Intermoco) (ASX CODE – INT) is pleased to announce that it has entered into an agreement to acquire a strategic position in Energy Mad Ltd (EM) and to acquire Advanced Energy Limited (AEL).
    EM controls the intellectual property, manufacturing and distribution rights for the mass market, new technology, light bulb, branded as ‘EcoBulb’. AEL is the retail distribution company marketing these products in Australia and internationally. Sales of the new product range are expected to exceed 75 million units over the next 4 years. Ecobulb is currently retailing in Australia at $8.75.
    Intermoco initiated these deals to position itself as a major, global distributor of environmentally friendly, EM products for households and commercial properties. Intermoco will realise significant benefits from these strategic acquisitions as a result of the changing Australian regulatory environment requiring the replacement of all household incandescent lights by the end of 2009. Similar initiatives are proposed for Europe, India and Canada. Signatory countries to the Kyoto protocol have an incentive to change to low energy bulbs under that protocol. These initiatives will drive sales of low energy bulbs in these markets due to the increasing worldwide community awareness of global warming impacts caused by carbon emissions.
    EM (www.energymad.com) is the New Zealand based company that developed the intellectual property and manufacturing infrastructure to produce superior light bulbs using less mercury and providing a greater benefit to electricity distribution utilities than market competitors. Initially Intermoco will buy approximately 10% of EM for NZ$5 million, with agreement to progressively move to 33% based on the current valuation and ultimately 51% with the concurrence of the EM Board. In excess of 3.5 million EcoBulbs were sold last year in New Zealand through distribution arrangements with Shell, Government
    agencies and utilities. These householders using EcoBulbs throughout the home will save approximately NZ$650 in energy cost over the life of the bulbs.
    Intermoco will assume the distribution rights to supply EM products to the retail market in Australia, and other international markets including China, the US, EU, Asia, Japan and India on the acquisition of AEL. Distribution arrangements are well advanced in both Australia and overseas. Sales of these energy efficient products generate both direct revenue and carbon credits. Carbon credits provide a potential future asset and revenue stream for Intermoco. Agreements have been reached with service organisations and other Australian corporations to distribute the product both directly and in conjunction with other energy efficient products including, for example, heating products distributed by Noirot Australia Pty Ltd. Noirot is Australia’s best selling electric panel heater. Distribution arrangements overseas are focused on obtaining regulatory approvals to sell the product. A distribution arrangement has been established in China which will commence marketing and selling operations as soon as the product receives regulatory approval from the EPA China.
    This strategic move builds on Intermoco’s positioning as a marketer of energy management products and the introduction of the energy efficient smart homes concept. It also complements Intermoco’s recent (January, 2007) alliance with the UK based PRI, a member of the Entity Group, to support smart metering for residential and commercial application. The Entity Group is one of the top five suppliers of meters and metering services worldwide.
    Consideration for the AEL acquisition will be the allotment of call options, issue of which will be subject to shareholder approval. The options are to be issued in two tranches. The first tranche of 200 million is exercisable over 3 years in lots of 40 million at 15 cents subject to the achievement of sales targets of 10 million units per lot. The second tranche of 150 million is exercisable over 4 years at 30 cents, subject to the prior exercise of the 15 cent options and the achievement of additional sales of 25 million units.
    Intermoco has appointed Bell Potter Securities Limited to underwrite the private placement equity raising of AUD$6 million for the purpose of funding the acquisitions. Intermoco has also arranged to raise a further $2 million if required to develop the distribution arrangements. Both the strategic investment and the acquisition are subject to due diligence and Board approval.
    Jeff Bennett
    Company Secretary
    [email protected]
 
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