Zicom Limited (ASX:ZGL) should trade firmer after its subsidiary, Zicom MedTacc, was appointed a Medtech Accelerator by SPRING Singapore, a Government’s agency responsible for enterprise development.
As an appointed Medtech Accelerator, SPRING Singapore will co-invest with MedTacc on growth phase medtech start-ups over the next 4 years on 1:1 basis.
MedTacc and SPRING shall commit S$15 million.
Coupled with SPRING’s coinvestment, the risks typical to such investments would be further mitigated for MedTacc.
Under the Scheme, SPRING would grant options to MedTacc to acquire their investments at nominal compound rates per year in the event the investments prove commercially viable and value may be unlocked.
Zicom's capital contribution to these growth phase start-ups will come from internal resources without any negative impact expected on its existing businesses. No bank borrowings are intended.
The scheme aligns with Zicom's strategy to increase focus on investments in technology and offers significant benefits in the medium to long term.
Zicom is capitalised at $44 million and booked $112 million in revenue and $4 million net profit for the financial year ending 30th June 2014.
The company also paid out a final unfranked dividend of $0.0045.
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