LONDON, UK: The 600 Group Inc. entered a non-binding letter of intent (LOI) with a U.S. based operationally-oriented mid-market private equity firm regarding the potential disposal of a majority interest in the business and assets of the Group’s wholly owned TYKMA Electrox and Control Micro Systems industrial laser businesses in the U.S.

The LOI envisages the potential disposal to entail the disposal by the Group of an 80 per cent stake in TYKMA Electrox and Control Micro Systems for a cash consideration of US$9.5 million, subject to customary working capital adjustments, with the Group retaining a 20 per cent interest in the Laser Business which would be subject to a put and call option arrangement between the parties.

The call option would be capable of exercise by the parties in the 30-day periods following the conclusion of either of the Laser Business’ FY25 and FY26 financial years should the Laser Business’ EBITDA exceed pre-agreed targets.

The Board would therefore expect the initial cash proceeds to the Group of the Potential Disposal, should it be completed, to be sufficient to pay off all existing Group bank borrowings, provide significant operating cash and the Company would retain a 20 per cent. interest in the ongoing operations of the Laser Business.

Whilst the LOI is non-binding as to the terms of the Potential Disposal which remains subject to, inter alia, contract, the Subsidiary has provided the Counterparty with a binding 90-day period of exclusivity to conclude the Proposed Disposal (the “Exclusivity Period”).

Paul Dupee, Chairman of 600 Group, commented: “The Group’s industrial laser businesses continue to be well placed in their respective highly fragmented markets. Whilst non-binding, the entry of the LOI with the counterparty provides scope for TYKMA and CMS, and the Group, to partner with a U.S. private equity firm in the continued future growth of the industrial laser business.”

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