FireAngel soars after securing ‘significant’ long-term partnership
Shares in (FA. ) soared this morning after unveiling that it has signed a long term partnership agreement to develop a new generation smoke alarm.
The Group, which is one of Europe's leading developers and suppliers of home safety products, said it has signed the agreement with a German energy and efficiency service provider, whose name remains undisclosed, which operates within the real estate sector.
The unnamed partner, which was founded nearly 70 years ago, provides services to approximately 12 million apartments worldwide and in its most recent financial period, being the six months ended 30 September 2020, had turnover of around €317 million.
Under the terms of the agreement, FireAngel said it will provide a fully funded research and development programme for a 10-year connected smoke alarm based on its Gen6 platform.
It said the new alarm will offer ‘additional, innovative safety and environmental features to meet the increased demands of landlords as well as tenants’ and both parties will have the right to use any foreground IP resulting from development of the new smoke alarm.
Pursuant to the terms of the partnership agreement, FireAngel said the Partner will fund the development phase of the next generation smoke alarm will FireAngel stated that it will receive a fee of £1.4 million for use of its background IP during the development phase.
After the production of the alarm has started, a royalty fee per product will be payable to FireAngel with a multi-million volume fee agreed for the initial 30 months. Meanwhile, manufacturing of this next generation smoke alarm is expected to commence in early 2024.
Shares in FireAngel Safety Technology Group have increased by over 30% in value since the beginning of November 2020. The stock was trading 68.97% higher at 24.5 this morning.
The company highlighted to investors that it is forecast that 7 million new devices will be produced with a minimum of 3.5 million expected to be produced in the first 2.5 years.
It is anticipated that FireAngel will be responsible for production of the new smoke alarm and that a manufacturing partner will be selected jointly during the development phase.
It is also expected that FireAngel will receive a minimum 3 year manufacturing commitment and will receive a manufacturing and support fee payable for each device delivered, it said.
John Conoley, Executive Chairman of FireAngel, commented, "This is the most significant development for FireAngel for several years and is expected to be transformational for the Group. The directors estimate that, during the life of the partnership, the Company should earn up to €21 million in royalty, management and support fees.”
“Our long-standing commitment to R&D, combined with the adoption of development processes from the IT world, have contributed to us signing this partnership which will be materially cash positive and contribute financially to the Company for the long term.
Finally, it reflects our aim to spend more of our time and resource on higher value activities. The customer has acted like a true partner throughout this long process,” he added.
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