VULC Vulcan Industries Plc

 
TIDMVULC 
 
14 October 2022 
 
                             Vulcan Industries plc 
 
                          ("Vulcan" or the "Company") 
 
                      Acquisition of Peregrine X Limited 
 
Vulcan Industries plc (AQSE: VULC) is pleased to announce that it 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 ("Peregrine" 
together the "Peregrine Group") From Unity Global - FZCO (the "Vendor" or 
"Unity Group"). The terms are conditional only on documentation of the 
acquisition agreement. 
 
Acquisition rationale 
 
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 Group 
 
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. 
 
Total Consideration 
 
The total consideration payable is £5,000,000 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 £1,000,000 notes with deferred consideration 
of four tranches of £1,000,000 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 notes may be converted at will by the Company, or after the four tranches 
of deferred consideration have been triggered, by Peregrine. The conversion 
price is 1p per new ordinary share.  Conversion of the full consideration would 
result in the issue of 500,000,000 new ordinary shares of £0.0004 each, being 
approximately 46.2% of the enlarged share capital today. 
 
In addition, the Company has agreed to enter a Royalty agreement whereby the 
vendors will receive a Royalty of 70% of the post tax earnings of the Peregrine 
Group This has been capped. At present the Peregrine Group has generated no 
revenue and there is no guarantee that revenue will be generated. Both 
Peregrine and the Company have options to terminate the Royalty agreement once 
2,000 tests have been contracted for and 200 tests delivered. 
 
The Company has agreed to issue 50,000,000 warrants to the Vendor with an 
exercise price of 1p and a term to 31 March 2024. 
 
In addition, the Vendor will receive warrants for any shares issued in 
settlement of the Royalty agreement with a term to the later of 12 months from 
the date of issue or 31 March 2024. The exercise price will be the price of the 
related equity issued to settle Royalty obligations. ("Vendor warrants"). 
 
Related Party Transaction 
 
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." 
 
For further information, visit: https://vulcanplc.com 
 
The directors of Vulcan accept responsibility for this announcement. 
 
Contacts 
 
Vulcan Industries plc                             Via Vox Markets 
 
Ian Tordoff, Chairman 
 
First Sentinel Corporate Finance Ltd              +44 7876 888 011 
(AQSE Corporate Adviser) 
 
Brian Stockbridge 
 
Jenny Liu 
 
Vox Markets (Media and Investor Relations)        vulcan@voxmarkets.co.uk 
 
Kat Perez                                         +44 7881 622 830 
 
Paul Cornelius                                    + 44 7866 384 707 
 
About Vulcan 
 
Vulcan has been incorporated to build a group of UK companies providing high 
quality products and services to the engineering, manufacturing and engineering 
sectors, particularly focussed on metal fabrication and precision engineering, 
which have underlying profitability and growth potential and can benefit from 
being part of a larger group focussed on similar or complementary sectors to 
the target. 
 
Vulcan seeks to acquire and consolidate traditional but historically profitable 
engineering, manufacturing and industrial SMEs for value and to enhance this 
value in part through group synergies, but primarily by unlocking growth which 
is not being achieved as a standalone private company. The group will also 
optimise productivity through the introduction of new technologies and 
processes. For more information visit https://www.voxmarkets.co.uk/listings/PLU 
/VULC 
 
About Unity Global - FZCO 
 
The Vendor is a subsidiary of the Unity Group, a mergers and acquisitions firm 
that specialise in attracting investment and creating opportunities for small 
to medium-sized enterprises ("SMEs") to scale. https://www.unity-group.com/ 
 
Forward Looking Statements 
 
This news release may contain "forward-looking" statements and information 
relating to the Company. These statements are based on the beliefs of Company 
management, as well as assumptions made by and information currently available 
to Company management. The Company does not undertake to update forward-looking 
statements or forward-looking information, except as required by law. 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014. Upon the publication of this announcement via a Regulatory 
Information Service, this inside information is now considered to be in the pub 
 
 
 
END 
 
 

(END) Dow Jones Newswires

October 14, 2022 11:48 ET (15:48 GMT)

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