TIDMSPSY TIDMSPSC
RNS Number : 4835V
Spectra Systems Corporation
04 December 2023
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN
OFFER OF SECURITIES IN ANY JURISDICTION. THIS ANNOUNCEMENT CONTAINS
INSIDE INFORMATION.
For immediate release
4 December 2023
Spectra Systems Corporation
("Spectra" or the "Group")
Acquisition of Cartor Holdings Limited
To accelerate the Group's penetration of the polymer banknote
substrate market and open new sales channels for its security
products
Spectra Systems Corporation (AIM: SPSY.L), a leader in
machine-readable high speed banknote authentication, brand
protection technologies and gaming security software is pleased to
announce that it has entered into a conditional agreement to
acquire Cartor Holdings Limited ("Cartor"), a leader in the
security printing industry, for a maximum consideration of GBP10.5
million (the "Acquisition"). Completion of the Acquisition
("Completion") is subject to certain customary conditions.
Highlights
Once completed and Cartor has been integrated into the Group,
the Acquisition is expected to:
-- Consolidate the supply of Spectra's Fusion(TM) polymer substrate within the enlarged Group
-- Increase margins on polymer substrates by bringing profit margin within the enlarged Group
-- Open new sales opportunities for Spectra security products in:
o postage stamps,
o tax and revenue stamps,
o brand protection and security labels,
o other security documents
-- Increase combined earnings through replacing current supplies
to Cartor with Spectra's optical materials
-- Increase product development capabilities with direct access
to Cartor's state-of-the-art printing capabilities
-- Increase visibility for Spectra through two facilities in
Wolverhampton, UK, and Meauce, France, giving the enlarged Group
presence in four G7 countries
Background on Cartor
Cartor, through its three wholly-owned subsidiary companies,
operates from two manufacturing sites in the UK and France,
supplying postage stamps to over 180 administrations globally. In
addition to conventional and hybrid postage stamps, it prints and
produces tax stamps, vouchers, coupons, certificates, and security
documents, and provides a safe and secure environment for hand
assembly and fulfilment. Cartor differentiates itself from its
competitors by using state-of-the-art technology to make it
difficult for counterfeiters to operate in industries with high
monetary or intellectual value products and services.
In addition to its core security printing business, Cartor has
worked with Spectra for the past two years to develop the necessary
expertise to produce Fusion(TM) substrates for qualification by
central banks and leading polymer banknote printers.
In its year ended 30 September 2022, based on audited financial
statements prepared in accordance with UK GAAP (FRS102), Cartor
generated an EBITDA of GBP3,022,088 and profit before taxation of
GBP1,010,026 on turnover of GBP16,022,532. Its net assets at that
date were GBP4,441,120. In its year ended 30 September 2023, based
on unaudited management accounts, Cartor generated an EBITDA of
GBP2,525,100 and profit before taxation of GBP435,600 on turnover
of GBP16,188,200. Its net assets at that date were GBP4,909,800. No
tax was paid in either year due to offset against capital
expenditure and tax losses, of which c. GBP1.9 million remain
available.
Summary of the Acquisition
Spectra will acquire 100% of the outstanding shares of Cartor on
Completion. The consideration for Cartor comprises:
-- GBP5.5 million to be satisfied in cash on Completion;
-- up to GBP3.0 million, subject to customary net asset, net
cash and third-party debt adjustments to be made prior to
Completion, which will be satisfied through the issue of new shares
of common stock of Spectra ("Shares") on Completion at the
thirty-day volume weighted average stock price of Spectra's shares
prior to the date on which the conditions to Completion (except the
admission of the Shares to trading on AIM) are satisfied. A total
of GBP1 million of the Shares will be subject to 12-month lock-up
agreements (subject to customary exceptions); and
-- a potential further sum of GBP2.0 million, which may become
payable by Spectra by no later than 18 months after Completion,
through the issue of further Shares, in the event that Spectra has
qualified its Fusion(TM) polymer substrate for tender submissions
with a central bank customer. If this consideration becomes
payable, this tranche of Shares would be issued at the higher of
(i) the thirty-day volume weighted average stock price of Spectra's
shares prior to Completion; and (ii) the five-day volume weighted
average stock price of Spectra's shares at the time of a successful
qualification by a central bank.
In addition, Spectra will assume up to GBP4.5 million of
Cartor's current external debt, at an average interest rate of
0.3%, as part of the Acquisition.
Completion is conditional on the satisfaction of customary
conditions, including obtaining consents from certain customers of
Cartor. Spectra currently expects Completion to occur during
December 2023.
On Completion, each member of Cartor's senior management team
will enter into a new employment agreement with Cartor. Cartor will
also enter a new 20-year lease on Completion in respect of Cartor's
purpose-built manufacturing facility in Wolverhampton, UK.
Rationale for the Acquisition and Increased Opportunity
The international polymer substrate market currently has only
two suppliers, CCL Industries in Canada and De La Rue International
in the UK. Spectra's research and dialogues with central banks has
clearly shown the desire of the banks to have another supplier of
ready to print bespoke polymer substrate.
Spectra has been working with Cartor for two years to achieve
high quality conventional and machine-readable, ready for printing
polymer substrates which include conductive layers, opacity layers
and bespoke window designs as required by central banks. Spectra
has enhanced its competitive position in the market by further
integrating the production supply chain of Fusion(TM) .
In addition to driving Spectra's growth in the polymer substrate
market, the Acquisition will, in the opinion of Spectra's Board of
Directors, enable Spectra to introduce its advanced security
technologies into Cartor products which include postage stamps, tax
and revenue stamps, brand authentication labels and ID documents.
Cartor has established an international presence in these products,
which currently utilize various public features, and is expected to
be able to both develop the necessary processes to integrate
Spectra's technologies, as well as work with its customers to
upsell Spectra products.
Dr. Nabil Lawandy, Chief Executive Officer of Spectra,
commented: "The Spectra Board of Directors and I are delighted to
announce the acquisition of Cartor to solidify our position in the
polymer substrate market and expand our business through new sales
channels. Our experience in working with the Cartor team for two
years has been exceptional and I have great confidence in the
leadership of the group led by Andrew Brigham (Managing Director),
Ian Brigham (Chairman) and Martin French (Finance Director).
Andrew, Ian and Martin are experienced, innovative, resourceful and
energetic individuals, with whom I am excited to work to increase
our revenues and earnings over the coming years.
"Given Spectra's strong cash position as well as cash
generation, the Board is confident that we will continue to issue
our dividends and meet our customers' financial obligations
following Completion."
Andrew Brigham, Managing Director of Cartor, commented: "The
acquisition comes at a time when Cartor is poised for growth and
under Nabil's leadership we hope to accelerate this and unlock new
opportunities. The Cartor group expects to leverage Spectra's deep
technical expertise and Cartor's operational 'know-how' to deliver
game changing solutions to its current and future customers."
Ian Brigham, Chairman of the Board of Cartor, commented: "I have
spent most of my career in the security printing industry and I am
very much looking forward to this next chapter working with Nabil
and the high performing Spectra team to grow revenues and earnings
through new opportunities."
Enquiries:
Spectra Systems Corporation Tel: +1 (0)401 274 4700
Dr. Nabil Lawandy, Chief Executive Officer
WH Ireland Limited (Nominated Adviser and Joint Broker) Tel: +44 (0)20 7220 1650
Chris Fielding/ James Bavister (Corporate Finance) Tel: +44 (0)20 3328 5665
Fraser Marshall (Corporate Broking)
Allenby Capital Limited (Joint Broker)
Nick Naylor/James Reeve (Corporate Finance)
Amrit Nahal (Sales and Corporate Broking)
Important Notices :
The person responsible for arranging the release of this
announcement on behalf of the Company is Dr. Nabil Lawandy, Chief
Executive Officer of Spectra.
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
This announcement contains certain forward-looking statements.
No forward-looking statement is a guarantee of future performance
and actual results or performance or other financial condition
could differ materially from those contained in the forward-looking
statements. These forward-looking statements can be identified by
the fact they do not relate only to historical or current facts.
They may contain words such as "may", "will", "seek", "continue",
"aim", "anticipate", "target", "projected", "expect", "estimate",
"intend", "plan", "goal", "believe", "achieve" or other words with
similar meaning. By their nature forward looking statements involve
risk and uncertainty because they relate to future events and
circumstances. A number of these influences and factors are outside
of the Group's control. As a result, actual results may differ
materially from the plans, goals and expectations contained in this
announcement. No statement in this announcement is intended to be,
nor may it be construed as, a profit forecast or be relied upon as
a guide to future performance. Any forward-looking statements made
in this announcement speak only as of the date they are made.
Except as required by applicable law or regulation, Spectra
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained in this announcement.
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END
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Spectra Systems (LSE:SPSY)
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Spectra Systems (LSE:SPSY)
過去 株価チャート
から 12 2023 まで 12 2024
