Israel's Espro Information Technologies Ltd (Ofex: ESP), a provider of multi-lingual audio guidance systems for museums, tourist attractions and trade shows in 16 countries and the first Israeli company to go public on Ofex, today announced that its subsidiaries ESPRO Holland BV and ESPRO Corporation have signed an agreement to acquire Acoustiguide Corporation, a worldwide audio guiding business to more than 150 museums, visitor centres and tourist attractions in the US, UK, Germany, Taiwan, China and Australia.
The total consideration of the acquisition is $3.6 million. Espro expects to secure the necessary funding from existing shareholders and new investors in both the US and Europe.
In addition to the cash element of the transaction, the Company will issue to Acoustiguide a warrant to purchase 500,000 Ordinary shares of Espro at an exercise price equal to 120% of the price per share on the date of the closing of the transaction. The warrants will have a 4 year term and will not be exercisable for a period of six months from the completion of the acquisition. It is intended that the completion of the acquisition will take place by the beginning of April 2005, and a further announcement will be made in due course.
This is Espro's first acquisition since going public on Ofex. It will create the world’s largest stockmarket quoted company in the audio guiding market by market share, geographical spread, annual revenues, number of customers and range of products. The enlarged group will become one of the two largest companies in the industry.
Acoustiguide, established in 1964, has a client list that includes the Museum of Modern Art in New York, the Tate, the Tate Modern, the Imperial War Museum, the Cabinet War Rooms, the National Gallery in Washington DC, the Guggenheim Museum in Bilbao, Spain, and the Forbidden City in Beijing.
Espro was founded in 1992. Its clients include the West Walls tourist attraction in Jerusalem, the Coliseum, Rome, the City of Pompeii, Italy, the State Hermitage Museum, St. Petersburg, the Bodleian Library, Oxford and the Rodin Museum, Paris.
The purchase price for the Acoustigade business includes its assets and liabilities, its more than 150 contracts worldwide, its equipment and control of its operating subsidiaries in the UK, Germany, China, Taiwan and Australia. Acoustiguide has intellectual property, for some of its products in many countries worldwide. Its products include the ‘Inform Wand’, ‘Denon’, an advanced headset player, and a new generation of digital equipment called the ‘Acoustiguide 2000 Series’.
For the six months ending December 2004, Acoustiguide had unaudited consolidated revenues of $6 million (unaudited), compared to revenues for the 12 months ending June 2004 of $9 million. Net profit for that period amounted to $0.36m (unaudited) against a loss from continuing operations of $0.45m for the 12 months ending June 2004.
Espro stated that it intends to initiate a new fund raising in London and overseas.
Espro CEO Israel Gal, who will become CEO of the merged group, stated, “The geographical synergy of the deal brings together Espro, which is dominant in Europe, and Acoustiguide, which is dominant in the UK, the US and Asia, to create a truly worldwide market leader in the audio guiding industry. The enlarged group will have combined revenues of $14 million, as at end December 2005.”
“It will provide Espro with a direct presence and sales offices in New York, London and other major cities, with the opportunity to introduce its audio guiding and MyCollection technologies into Acoustiguide’s geographical areas of operation, where Espro has not been as active. The enlarged group will have a customer base and product range second to none in its field.”
Acoustiguide’s senior management team, Ted Vasquez, Kathryn Glass and David Wynne will remain with the enlarged group, which will employ approximately 85 people. The head office will be in London. Acoustiguide will maintain offices in New York, London, and other cities.
Published by Globes [online], Israel business news - www.globes.co.il - on Tuesday, March 01, 2005