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Posted: Oct 20, 2011
Nanostart Holding ItN Nanovation AG Finalizes Contracts for Joint Venture With Juffali in Saudi Arabia
(Nanowerk News) Nanostart-holding ItN Nanovation AG has finalized the binding contracts on the joint venture in Saudi Arabia that was preliminarily agreed in October 2010. The renowned Saudi-Arabian partner Juffali and the consortium of German industrial investors have now signed the contracts and the Management Board and Supervisory Board of ItN Nanovation have approved the signature.
This means that, following intensive negotiations, ItN Nanovation has achieved a key milestone in its international expansion in the area of ceramic flat membranes, known as CFM SystemsŪ. The pre-contractual financial framework that was announced by ItN Nanovation in an ad hoc disclosure on October 26, 2010 has been implemented in full. ItN Nanovation will initially hold a 17.5 per cent stake in the joint venture with the Saudi investor Juffali, Jeddah, and the consortium of German investors. An option to increase this stake to 40 per cent has also been contractually agreed and may be exercised until 2015.
The next phase in the formation of the joint venture involves obtaining the necessary business license from the Saudi authorities in order to formalize the joint venture. Based on the preliminary discussions conducted to date, it may be possible to achieve this before the end of 2011. In accordance with the terms of the contract, ItN Nanovation will receive an amount of USD 2.35 million (approx. EUR 1.75 million) in advance for the limited contribution of production expertise; around two-thirds of this amount will be used by ItN Nanovation to acquire its stake in the joint venture. The total amount is expected to be recognized as other operating income by ItN Nanovation after the business license for the joint venture in Saudi Arabia is granted. In addition to this one-off payment, ItN Nanovation will receive revenue-based royalties, while its shareholding means that it will also participate proportionally in the earnings and value development of the joint venture.
The joint venture will trade under the name Saudi Water Nanovation LLC and will distribute CFM systems and corresponding accessories for ceramic flat membrane solutions in the MENA (Middle East & North Africa) region and produce these locally at its own facilities in Saudi Arabia. In particular, the products of the joint venture will be used in the area of prefiltration for reverse osmosis for the treatment of drinking water. The plan is for the joint venture to establish its own production facilities, which will in their final construction phase (scheduled for 2014) offer three times the capacity currently available to ItN Nanovation. The joint venture will be able to start production already in 2013.
The local presence of the joint venture, including production in Saudi Arabia, will significantly improve market access for ItN Nanovation, thereby allowing it to better address a region that is one of the core markets for the treatment of drinking water using ceramic flat membranes. The joint venture also marks another milestone for ItN Nanovation by allowing the mass production of CFM systems, as well as representing a further proof of concept of the performance and industrial applications of ItN technology in cooperation with external international partners.
Nanostart AG headquartered in the German financial capital of Frankfurt, is a leading nanotechnology investment company, with portfolio companies spanning the globe from Silicon Valley to Singapore. The company provides venture capital financing for nanotechnology companies in various growth phases with a focus on innovation-driven industries of the future such as cleantech, life sciences and IT/electronics. Through its subsidiary Nanostart Asia and the venture capital fund in Singapore, Nanostart is proud to be the investment partner of the Singaporean government.
About ItN Nanovation
ItN Nanovation AG is one of Germany's leading nanotechnology companies. It develops innovative ceramic products such as filter systems and coatings for major industrial customers. The company manufactures the necessary nanoscale powder in-house. ItN Nanovation's filter products can be used for drinking water treatment and wastewater purification, as filters in the drinks industry and to separate oil and water. Nanotechnology-based ceramic coatings are used as protective and catalytic layers in a wide range of applications in various industries, from ovens through aluminum foundries to coal-fired power stations. ItN Nanovation was founded in 2000. The company's success is based on an extensive patent portfolio combined with in-depth development and application expertise. For more information on the company, please visit www.itn-nanovation.de.
The Juffali family is one of the most influential industrial families in the Middle East. The family company E. A. Juffali & Brothers, which was formed in 1948, cooperates with leading global industrial groups with a particular focus on innovative, high-growth industries. For more than five decades, E. A. Juffali & Brothers has made a key contribution to the innovative technological development of Saudi Arabia through the establishment of joint ventures and production facilities in the country. The partners of E. A. Juffali & Brothers include leading international companies such as Mercedes-Benz, Siemens, IBM, Dow Chemical, DuPont, etc. More information on E. A. Juffali & Brothers can be found at: www.eajb.com