Rex International Holding Limited (Rex International Holding or the Company, and together with its subsidiaries, the Group), one of the largest companies listed on the Catalist of the Singapore Exchange Securities Trading Limited, announced Wednesday that it has today, signed a sale and purchase agreement to acquire 100 percent shareholding interest in Rex Technology Management Ltd (RTM), including the latter’s suite of proprietary and innovative exploration technologies, Rex Technologies comprising Rex Gravity, Rex Seepage, and Rex Virtual Drilling (Rex Technologies), of which the Company is the exclusive licensee, at a nominal price of $1. The acquisition will be completed by Dec. 1 or such other date as the parties may mutually agree in writing (the Completion Date) and RTM will operate as a wholly-owned subsidiary of the Company. The Company shall also take over all of RTM’s staff, who shall be included in the Company’s performance share plan, subject to the Remuneration Committee’s approval. All RTM staff will be bounded by non-compete agreements.
Dan Brostrom, executive chairman of Rex International Holding, said, “Over the past year since our listing in July 2013, we have received feedback from many investors, their preference for our key differentiator, the Rex Technologies and specifically, Rex Virtual Drilling, to be housed in the listed entity. We are heartened by our founders’ and majority shareholders’ unstinting support in agreeing to have RTM included under Rex International Holding’s auspices, after considering the potential value creation that will result from the Group’s direct ownership of the Rex Technologies, as compared to being an exclusive licensee; while preserving the strict confidentiality of how the technologies work.”
“Having RTM under the Group will allow us to bolster our value offering, over and above our portfolio of high quality assets scanned with Rex Virtual Drilling, as we will have complete control over the use of the proprietary Rex Technologies. RTM will immediately contribute attractive recurring income from their existing contracts. There remains much potential for future research and development advancements for the Rex Technologies.” Brostrom added.
Hans Lidgren, one of the founders of Rex International Holding and head of technology development at RTM, said, “We are committed to giving Rex International Holding full support for it to achieve its vision to be a leading independent exploration and production company that has an international portfolio of concessions, selected using our proprietary Rex Technologies. The RTM team is excited to join the Rex International Holding family and looks forward to even closer collaboration going forward.”
RTM has signed contracts with an estimated annual value of $10 million. Revenues from RTM will be consolidated on Completion Date. The Company expects RTM to contribute positively towards the Group’s revenue in the fourth quarter of 2014.
The Company believes that the acquisition of RTM will have the following immediate positive effects:
The Company had Aug. 13 announced the addition of Rex Gas Indicator (RGI), an exploration technology to be used to detect gas hydrocarbon accumulations using seismic data interpretation analysis, which had yielded promising initial results. As RGI needs further development before commercialization, it will not be included in the Acquisition. However, subject to compliance with relevant rules and regulations, the Company retains a right of first refusal exercisable until Dec. 31, 2015 to purchase the technology at a price and on such terms and conditions to be determined by the vendor and the Company should RGI prove to be commercially sustainable in upcoming tests, subject to compliance with the Catalist Rules.
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