Completion of the acquisition is expected in Q1, 2007. QR Sciences will acquire the business at the adjusted value of the nominated assets, plaus a subsequent goodwill payment equally in scrip and cash, based on a 4-times multiple of audited EBIT for the 12 months to June 30, 2007. A deposit of $A200,000 will be paid to Baxall, comprising $A50,000 cash, with the balance in fully paid QRS shares.Baxall Australia was established in Port Melbourne in 2005 as a direct seller and distributor of surveillance and monitoring equipment, including CCTV cameras and digital video recorders. The company employs 15 people across Australia with warehouse and sales facilities in Brisbane, Melbourne and Sydney. The business is expecting revenues in excess of $A15 million in the coming financial year. the acquisition gives QR Sciences an established sales team and access to the fast growing local CCTV distribution market. Baxall Australia is underpinnedby key supply contracts with some of the world’s leading CCTV manufacturers and a long-term partnering and distribution agreement with Baxall UK. Rick Stokes, Baxall Australia’s CEO, has 15 years experience in the CCTV industry and has been an integral part of the development of that market in Australia through past positions at Hills Industries, Vicam CCTV Systems and Pacific Communications. Stokes will continue to work with Baxall Australia in a full-time capacity.“Acquisition of Baxall Australia provides QRS with a ready-made sales and distribution capability across the country as well as an overseas networks of representatives, security consultants, local distributors and connections in Asia,” says QRS CEO, Kevin Russeth.“These channels constitute a profitable and growing revenue-based security distribution business with further growth driven by sales of QR Sciences proprietary products,” said Russeth. “QRS’ strategy is to continue to look for opportunities that create a short to medium term return to shareholders and to augment our R&D and product development capabilities.”
