UrtheCast Announces Entering into Definitive Agreements for the Acquisition of Geosys from Land O’Lakes
Press Release From: UrtheCast
Posted: Wednesday, November 7, 2018
UrtheCast Corp. (TSX: UR) (“UrtheCast”) announced that it has entered into a definitive purchase agreement (the “Purchase Agreement”) with Land O’Lakes Inc. (“Land O’Lakes”) for the acquisition of its wholly owned subsidiary, Geosys Technology Holding LLC (“Geosys”), and certain of its intellectual property (the “Geosys IP”) related to software for accessing, processing, cataloguing and retrieving of images, on substantially the same terms and conditions set forth in the binding letter of intent announced on August 14, 2018. UrtheCast also confirmed that, upon first closing, the Company would enter into a new 13-year agreement to provide Land O’Lakes with certain services currently provided by Geosys to Land O’Lakes with total annual fees payable to UrtheCast in excess of US$10 million per year, and an increased rate at such time as the UrtheDaily Constellation is operational.
Under the Purchase Agreement, UrtheCast will pay US$5 million to Land O’Lakes for 100% of the ownership of Geosys on the first closing of the transaction, US$5 million within nine months of the first closing and US$10 million for the acquisition of the Geosys IP on the second closing of the transaction. The first closing is expected to occur in 2018 and the second closing is expected to occur within 27 months of the first closing. Land O’Lakes has also agreed to provide to UrtheCast certain services and a license to the Geosys IP from the first closing until the second closing under an interim services agreement.
Donald Osborne, CEO of UrtheCast, commented, “The geoanalytic capabilities of Geosys will significantly expand our reach throughout the growing agribusiness industry, and coupled with our long term partnership with Land O’Lakes, will position us to generate improved near-term earnings as we continue to advance the UrtheDaily Constellation.”
UrtheCast intends to fund the acquisition of Geosys with a combination of available funds and debt for which it has obtained binding commitments. The first and second closings are subject to customary closing conditions and the transfer of certain intellectual property as part of a pre-closing internal reorganization. No regulatory or third party consents are expected to be required. The Purchase Agreement supersedes the binding letter of intent dated August 14, 2018 in its entirety.