Description of business:
The Versarien Group is an advanced engineering materials business developing valuable new materials through the commercialisation of new manufacturing processes. The Group's initial focus has been the development of the Lost Carbonate Sintering process, based on research carried out at the University of Liverpool, offering the ability to produce cutting edge porous metallic materials with exceptional heat transfer properties and a wide array of practical applications.
The Company, through its operating subsidiary Versarien Technologies, based in Cinderford, Gloucestershire, is currently focusing on the manufacture of a revolutionary micro-porous copper material called VersarienCu for use as a separate component in the manufacture of thermal management solutions by third parties, in addition to which the Group is developing market-ready assemblies of semiconductor cooling devices using VersarienCu and validating products for retrofitting into existing cooling systems.
Versarien Technologies' products are 3 - 10 times more effective than traditional cooling system components and have a range of advantages, which include being low-cost to produce, with high margins, and a manufacturing process which is robust, adaptable and highly scalable - factors that the Directors believe sets the Company apart from its competitors, as previously functional porous metals have not been available in this form and scale.
The company will contract, conditional on admission to trading on AIM, to acquire Total Carbide Limited, a long established advanced materials company manufacturing tungsten carbide components, in order to expand its production capabilities. Total Carbide is currently owned by AIM quoted Elektron Technology Plc and the consideration payable will be £2.3 million in cash and Versarien equity.
Founded over 50 years ago, Total Carbide is a manufacturer of sintered tungsten carbide for a number of key industries and supplies several major European companies from its facility in Princes Risborough, Buckinghamshire.
Total Carbide's products are made using a powder metallurgy process combining tungsten carbide particles in a supporting matrix, offering high wear resistance with toughness, which is a significant advantage over other materials such as steel and is cheaper over the life of the part. The company has a wide range of blue chip customers, principally in the field of oil exploration where Total Carbide's tungsten carbide parts are used in drilling and in the automotive, cutting and metrology fields.
Versarien is a newly established holding company for the Group and as such has no trading record. Versarien Technologies is still at an early stage of its development and in the six months ended 30 September 2012 reported a loss of approximately £168,000 on nil turnover.
Total Carbide reported a profit of approximately £57,000 on turnover of approximately £3.8 million in the year ended 31 January 2013, and at that date had net assets of approximately £504,000.
The Group is developing further products and applications of the LCS process as a result of its existing commercial relationships and will continue to support the University of Liverpool in its work with porous metal technologies. Furthermore, the Company aims to continue to develop the intellectual property from the University of Liverpool collaboration agreement, while building a wider portfolio of IP by engaging with its academic partners, including the University of Salford and the University of Birmingham, together with the University of Liverpool, and the Technology Strategy Board.
In addition, the Group will continue to focus on strategic competitions and the development of its brand via targeted exhibitions and industry events. The Directors also intend to undertake targeted trade, financial and regional PR campaigns, which, coupled with the proposed recruitment of a driven sales team, is expected to raise the profile of the Company within its target markets.