LONDON, UK: Vulcan Industries plc (AQSE: VULC) has entered into binding Heads of Terms to acquire the entire share capital of Peregrine X Limited and its 100% owned subsidiary Peregrine Analytics Limited from Unity Global – FZCO.
Peregrine has developed an analytical tool and algorithms using High Performance Capillary Electrophoresis (HPCE), an analytical separation method technology. Applications are suitable for the analysis of Oil and Water samples and Medical diagnostic purposes.
The initial applications will be to address oil well-head analysis where functionality to characterise Asphaltenes is highly sought after. The acquisition of Peregrine will enable the Company to broaden its industrial engineering activities into the energy sector.
Peregrine Analytics has developed its diagnostic technology over the last four years and is now ready to bring the product to market. The initial target market is the Middle East where contract negotiations are well advanced with preliminary tests for clients successfully completed. Peregrine is attending ADIPEC at the end of October 2022 to formally launch its product and service offerings.
Peregrine expects to commence the contractual delivery of tests no later than Q2 2023.
The total consideration payable is £5.0 million to be satisfied by the issue of zero-coupon convertible loan notes with a term of one year (CLN). Initial consideration will be the issue of £1.0 million notes with deferred consideration of four tranches of £1.0 million of notes to be issued on; (a) the receipt of an independent valuation of the Peregrine Group; (b) the commissioning of a laboratory facility in the UAE, (c) the signature of contracts for more than 250 tests and (d) the delivery of the first 25 tests. If no tests have been delivered within the term of the CLN, there is a mutual unwind clause.
The executive directors of Vulcan will receive 5% of the convertible loan notes and 5% of any royalties paid to Peregrine (the “Related Party Transaction” pursuant to Rule 4.6 of the AQSE Access Growth Market Rulebook). The 5% convertible loan notes worth up to £250,000 and 5% of any royalties paid to Peregrine will be split between Ian Tordoff and Neil Clayton.
The remaining directors of Vulcan, who have no interest in the transaction and who are independent for these purposes, being John Maxwell and Darren Taylor, having exercised reasonable skill care and diligence, consider that the Related Party Transaction is fair and reasonable as far as the shareholders of the Company are concerned.
Ian Tordoff, Executive Chairman: “The acquisition of Peregrine X (PX) presents a transformational opportunity for the Group providing Vulcan access to multiple new geographic markets and revenue streams. The PX technology has clear competitive advantages which early market engagements bear out. We are anticipating early adoption from a number of significant producers initially in the Middle East by considerably reducing well-production down-time. Like many others in the sector the Group’s UK businesses have worked through difficult trading conditions in the last 24 months and the European outlook for the period 2023-24 remains volatile. With the addition of PX, Vulcan is reducing its exposure to UK market conditions whilst extending its international client base and revenue generating capabilities. We welcome Justin Last and the PX team to the Group and look forward to working closely with PX to accelerate the roll-out globally.
Justin Last CEO Peregrine Analytics Limited: “This is an exciting milestone in our growth story and a great opportunity for both companies. We believe the Peregrine analytical capabilities have huge potential to disrupt data analytics in multiple sectors, but initially the Oil & Gas industry. The Company has identified significant opportunities and has been engaged with a number of clients who have long sought a solution to improved oil analytics data capture. Through the development of AI algorithms, Peregrine intends to develop various near real-time modelling techniques for oil components, primarily providing solutions for existing deposition issues. I am looking forward to working with the wider management team and I thank everyone who has been involved in getting us to this point including our valued investors, trusted advisers, and our enthusiastic channel partners.”