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Venteco PLC (VTO)

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Thursday 13 July, 2006

Venteco PLC

Proposed Acquisition

Venteco PLC
13 July 2006



                                  Venteco Plc
                          ('Venteco' or the 'Company')

                  Proposed acquisition of CTS Technologies AG
                    Notice of Extraordinary General Meeting
                 Application for re-admission to trading on AIM

                                                                    13 July 2006

The Directors of Venteco announce today that the Company has entered into a
conditional agreement to acquire the entire issued share capital of CTS
Technologies AG, a Swiss-based leader in non-poisonous pest control. The
consideration for the acquisition is £7.4m, to be satisfied entirely by the
issue of 227,692,308 Consideration Shares at 3.25p per share.

Due to the size of CTS in relation to the size of Venteco, the Acquisition is
classified as a reverse takeover under the AIM Rules and is, therefore, subject
to Shareholder approval at the EGM, which will take place at 10.00am. on 7
August 2006.

If all the resolutions are passed at the EGM, the Company will apply for the
Enlarged Issued Share Capital to be admitted to trading on AIM. It is expected
that this will become effective and dealings on AIM will commence on or around
11 August 2006.

CTS, which is based in Baar, Switzerland, is a specialist in non-poisonous pest
control which uses patented Cryonite technology to kill all life stages of
insects: adults, larvae and eggs, in a poison-free and environmentally friendly
manner. The technology involves the use of carbon dioxide gas which is sprayed
as a snow produced by a special nozzle thereby achieving rapid cooling.

CTS' products are primarily used by pest control operators (PCOs) and in end
markets such as the food processing industry. Because no toxic pesticides can
get into the product as is sometimes the case with chemicals, production does
not need to be shut down. The premises do not need to be evacuated and
production of foodstuffs can continue during sanitations, thereby making the
method cost-effective as well as environmentally-friendly.

While CTS currently operates primarily in the food processing industry, the
company believes that the method can also be used in other end-user markets such
as hotels, restaurants, offices, hospitals and homes. CTS has gained entry in a
number of international markets including the Nordic region, UK, Germany and
Japan, and is currently testing units in North America and Asia.

The Board of the Company will initially comprise one executive director and four
non-executive directors. Stefan Hansson, currently the chief executive of CTS,
is the proposed chief executive of the Group while Mats Andersson, chairman of
Venteco and former chief executive of Anticimex, will remain chairman. The other
three non-executive directors will be Dr Peter Cottee, the managing director of
RIWA Ltd, John Franklin, a former corporate financier at Swiss Re, and Haresh
Kanabar, chief executive of Blue Star Capital.

Mats Andersson, Chairman of Venteco, said: 'We are delighted to have entered
into this agreement with CTS, which we believe will offer shareholders exposure
to a unique technology in a sector ripe with opportunity for expansion. As
governments and regulators increase the pressure on users of pest control
products to reduce their use of poisonous substances, CTS is perfectly
positioned to continue its growth in the food processing industry and to move
successfully into other sectors with its environmentally-friendly and
economically-attractive Cryonite technology.'


For more information, please contact:

Venteco plc

Mats Andersson                             Tel. No. 00 44 (0) 20 7929 8989

Libertas Capital

Aamir Quraishi, Charles Goodfellow         Tel. No. 00 44 (0) 20 7569 9650

Corfin Communications

Ben Hunt, Neil Thapar                      Tel. No. 00 44 (0) 20 7929 8989



                                  Venteco plc
                          (Venteco' or 'the Company')
           Proposed acquisition of CTS Technologies AG Limited('CTS')
                    Notice of Extraordinary General Meeting
           Application for readmission to trading on AIM('Admission')
                                        

Introduction
The Directors of Venteco plc are pleased to announce that the Company has today
conditionally agreed to acquire the entire issued share capital of CTS. The
consideration for the Acquisition is £7.40 million, to be satisfied by the issue
of 227,692,308 Consideration Shares at 3.25p per share. Trading in Ordinary
Shares was suspended on 4 July 2006 as a result of press speculation concerning
the Acquisition. The price per Ordinary Share as at the close on 3 July 2006 was
2.75p.

CTS, which has its head office in Baar, Switzerland is a specialist in
non-poisonous pest control which uses patented Cryonite technology to kill all
life stages of insects: adults, larvae and eggs, in a poison-free and
environmentally friendly manner. The technology involves the use of carbon
dioxide gas which is sprayed as a snow produced by a special nozzle thereby
achieving rapid cooling. CTS' products are primarily used by pest control
operators (PCOs) and in end markets such as the food processing industry.
However, the Directors and the Proposed Director believe that the method can
also be used in other end-user markets such as hotels, restaurants, offices,
hospitals and homes. CTS has gained entry in a number of international
markets including the Nordic region, UK, Germany and Japan, and is currently
testing units in North America, Asia and Australia.

Due to the size of CTS in relation to the size of your Company, the Acquisition
is classified as a reverse takeover under the AIM Rules and is, therefore,
subject to Shareholder approval at the EGM, which will take place at 10.00 a.m.
on 7 August 2006. If all the resolutions are passed at the EGM, the Company will
apply for the Enlarged Issued Share Capital to be admitted to trading on AIM. It
is expected that this will become effective and dealings on AIM will commence on
or around 11 August 2006.

This letter sets out the background to, and reasons for, the Acquisition,
explains why the Board considers that it is in the best interests of the Company
and contains the Directors' recommendation that Shareholders vote in favour of
all the resolutions at the Extraordinary General Meeting.

Information on CTS

Background International regulatory authorities, such as the EU and the EPA, are
seeking to reduce the use of pesticides or poison to preserve the environment
and also reduce the risk of contaminated foods reaching the commercial market
place. The restrictions on the use of methyl bromide as a fumigant has had a
dramatic impact on the food industry over the past few years and has created a
need to find alternative ways to eliminate stored product insects without using
traditional residual insecticides. This is particularly the case with food
processors/manufacturers, food warehouses, restaurants and other food handling
establishments (such as institutional facilities, lodging/hospitality
establishments and healthcare facilities) which are also seeking to reduce the
use of pesticides. In addition, such establishments are looking to reduce or
eliminate the downtime necessary following sanitations due to the presence of
pesticides in the working environment.

The Cryonite technology owned by CTS provides a platform for a range of products
initially focused on the food sector which avoid the use of traditional
pesticides. As such, premises do not need to be evacuated and production of
foodstuffs can continue during sanitations thereby reducing the downtime. CTS'
method of pest control - namely, killing all life stages of insects through
freezing instead of using
poison - was developed in Sweden between 1996 and 1999 by Per-Ake Hallberg, an
engineer with a background in quality control within the food industry and
Bertil Eliasson, a biologist. The intellectual property was originally developed
and held by a company called Cryonite Technologies and Services CTS AB.

In December 1998, venture capital firm Biolin Medical AB entered into an
agreement with Bertil Eliasson and Per-Ake Hallberg, the two original inventors.
This agreement created Cryonite Technologies and Services CTS AB, a company
formerly called Sinterkil AB. From 2000 onwards the technology was further
developed and moved towards commercial validation. As part of the transfer of
intellectual property rights, the original inventors retained 30 per cent. The
validation process involved physical and biological laboratory studies in
collaboration with leading pest control operators (''PCOs'') and other
independent organisations.

In November 2004, CTS was incorporated to acquire from Cryonite Technologies and
Service CTS AB all intellectual property rights to the technology. Subsequently
CTS moved its head office to Baar, Switzerland to facilitate market expansion
into Europe.
Together with its launch customers, Anticimex and Linde, the latter with whom it
has signed a licensing and co-operation agreement for a number of markets in
Western Europe, CTS has successfully carried out several sanitations at various
food manufacturing and processing plants. Current PCO customers, that have
either bought or are currently trialling Cryonite technology include Anticimex
(Sweden), Ecolab Inc. (US), ISS A/S (Denmark), Ikari Corporation (Japan) and
Semco Limited (Japan). In addition, trials have taken place with leading food
companies over the last twelve months that have led to sales.

CTS' Cryonite units are currently being used in 16 countries throughout the
world. In the period to 31 December 2005, more than 200 Cryonite units were sold
by CTS, generating total revenues of CHF562,569 (£248,539).

Cryonite is covered by extensive patent protection internationally and CTS is
the beneficial owner of the intellectual property related to the technology. The
Cryonite name is a registered trademark in several countries within Europe,
including France, Germany and the UK, and an application for registration of
this mark has been made in various other countries including the US and Japan.
Recently, CTS' Cryonite technology was recognised by the UK's Society of Food
Hygiene Technology (SOFHT) as Best New Product for the year 2005.

Cryonite and its advantages

One of the essential requirements for insects to thrive is a suitable
temperature range. It follows that the artificial adjustment of temperature
outside the optimal range for an arthropod pest will exert a controlling
influence, and may result in the loss of life.

Insects generate heat principally through metabolism but, as this is relatively
low, the body temperature is essentially that of the environment. Their
susceptibility to heat depends upon the species involved, its form (egg, larva,
pupa, adult), the temperature and time over which it is applied and the
humidity. Experts agree that insect pests succumb to temperatures of around
50degreesC to 60degreesC depending on exposure.

Insect activity is inhibited at around 5degreesC, whilst most insects are killed
when they are frozen. The ability of an insect to resist low temperature depends
upon the species, its form, origin and the temperature to which it has become
acclimatised. Temperatures of around -20degreesC to -30degreesC have been
employed to kill insects.

Cryonite uses a freezing technology that allows for non-poisonous pest control
in an environmentally-friendly manner. Liquid carbon dioxide is forced out
through a nozzle and converted to ''snow'' at a temperature of approximately
-80degreesC. Producing exactly the right size of particle and controlling the
speed at which they pass through the nozzle means that cooling is very quick and
precisely concentrated. The particles are too small to form an insulating layer 
of snow on the surface to be treated and too large to cool down the surrounding 
air. Instead, cooling is concentrated on the surface where the pests are. 
Cryonite works particularly well on pests that thrive in warm conditions. These 
pests are usually very sensitive to cold and die as soon as the cold carbon 
dioxide is sprayed on them. When the carbon dioxide snow hits surfaces at 
normal temperatures it evaporates and converts to carbon dioxide gas. During the 
conversion process, heat energy is required which is extracted from the 
immediate surroundings or from the insect itself. Under extreme cooling, the 
water in the insect's cells crystallises to ice, killing it. This 
crystallisation occurs when the pest is cooled to temperatures between 
-20degreesC and -30degreesC.

The carbon dioxide snow made by Cryonite is a mixture of different sizes of
particles. This snow composition has optimum freezing qualities. Cryonite's
particles are optimised for reaching the pest, and clinging to it for a
sufficient enough time to kill it. Condensation is avoided as the material onto
which the snow is sprayed generally has the ability to transport energy from its
larger mass thereby resulting in a relatively small drop in temperature of the
material or object treated.

Cryonite's method is suitable both as a preventative measure and for the
eradication of insects. Because no toxic pesticides can get into the product as
is sometimes the case with chemicals, production does not need to be shut down.
The premises do not need to be evacuated and production of foodstuffs can
continue during sanitations, thereby making the method cost-effective. Most
importantly, tests carried out by pest control professionals in Northern Europe
and Japan show that Cryonite is regarded as quick and convenient to use when
compared with solutions involving chemicals or pesticides.

Cryonite offers several significant advantages over the use of traditional pest
control technologies. These include:

   •preserves a poison-free environment;
   •broad-based efficacy;
   •kills not just the adult insects, but also the eggs and larvae;
   •dry method, thus leaves no residue;
   •production downtime at the dry food industry can be kept at minimum;
   •can be applied in direct contact with food items, permitting use in areas
    where conventional liquid
   •insecticides are not allowed;
   •current method does not require approval of regulatory authorities in key
    markets;
   •equipment easy to operate and quick to learn how to use - limited
    specific training is required; and
   •carbon neutral - uses carbon dioxide produced as a by-product of other
    industrial processes, so no extra carbon dioxide is delivered into the
    atmosphere which would otherwise result in the contribution to the
    greenhouse effect.

Intellectual property

Patent protection for Cryonite has been applied for (and in certain territories
has been granted) in relation to three patent families. The first family is for
the Cryonite mechanism patent - this is the special design of the nozzle for
controlling carbon dioxide snow particle size and speed. The European patent
(EPO) covering the
Cryonite nozzle has been registered nationally in 16 European countries, the US,
Mexico, China and is pending in 5 further countries. The second family is for
the Cryonite snow patent - this is arguably the most important patent family and
relates to the range of particle sizes and speeds that have been shown to have a
superior cooling effect at surfaces. Patents have been granted in the US and
China and various applications are pending. The third family is an extension of
the second family for a wider use of the same equipment. Applications for this
patent family have been made in various territories (including Europe and the
US) and are pending. The Directors and Proposed Director expect further patent
applications to be filed covering pest control application and other related
processes. In addition, the trademark Cryonite(R) is registered in 14 European
countries and is pending in 4 further territories, including the US and Japan.

Regulatory environment

The pesticide industry is heavily and increasingly regulated. This is
advantageous to CTS in a number of ways. CTS' Cryonite product is exempt from
the requirements of pesticide registration in certain key markets such as the
USA, as it qualifies as a device rather than a pesticide, thereby avoiding the
approval process altogether. In addition, the current regulatory environment has
reduced the number of available pesticides in the marketplace. The complete loss
or restricted use of selected pesticides, as mandated by national and
international acts such as the Food Quality Protection Act (FQPA), has seen the
ban of methyl bromide and organochlorines. Moreover, food retailers such as
Marks and Spencer Group plc have publicly announced that they are committed to
phasing out any pesticides which may pose risks to health or the environment,
even before they are officially banned by regulatory authorities. The period of
change has created opportunities within CTS' existing and potential customer
base, as many are being compelled to change the
pesticides they use, or resort to alternative methods, such as CTS' Cryonite.
Regulators, the pest control industry and customers such as food companies are
increasingly looking to reduce the amount of pesticides used in connection with
sanitising premises. In relation to the food industry, which is an area of focus
of CTS, this is largely driven by organisations such as the Environmental
Protection Agency and the Food & Drug Administration (EPA/FDA) in the US, the 
European Food Safety Authority in Europe, the Food Standards Agency in the UK 
as well as the European Commission's Biocidal Products Directive, which puts 
increasing pressure on the food industry to cut back its use of pesticides.

In the US, the regulatory environment is concerned not just with the composition
of materials but the efficacy and anti-microbial claims made about the products.
EPA registration is essential for substantial sales into key markets in the US
and is recognised in many countries as well. As mentioned above, Cryonite
received exemption from EPA registration in April 2006, but remains subject to
certain local labelling and packaging requirements. EPA authorisation/
registration was an important part of CTS' strategy and a milestone towards
market penetration in the US.

Market opportunity

The demand for pest control is increasing globally as growing public concern
about health and hygiene places demands on PCOs. In particular, pesticide-free
methodologies, such as CTS', exhibit even greater demand. Research conducted by
Specialty Products Consultants in April 2006 indicates an annualised growth of
PCO service revenue in the US of 5.6 per cent. with total revenues at around
$6.5bn. US food-handling establishments, which include restaurants,
institutional facilities, lodging/hospitality establishments, healthcare
facilities, food processors and food warehouses (i.e. CTS' core target markets),
represent approximately $1.0bn in service turnover, as research by Kline &
Company suggests (January 2006). Furthermore, a significant proportion of major
US food companies have brought the pest control function in-house, which is 
expected to benefit CTS.

The Directors and Proposed Director believe the current environment in the
global pesticide market is very favourable to CTS and that several conditions
are in place to support its growth. These include:

   •Regulatory barriers to entry for new biocidal chemicals: regulatory
    pressures are reducing the number of current biocidal materials available
    for use and, with the implementation of the European Commission's Biocidal
    Products Directive - becoming effective in May 2010 after a 10-year
    transitional period - the Directors and Proposed Director believe it will
    become increasingly difficult to win approval for new pesticides. CTS is
    well placed to take advantage of the regulatory environment since its
    technology is environmentally friendly, easy to use, effective and exempt
    from pesticide registration in key markets


   •Environmental considerations: public concern over pesticide residues is
    increasing and is a major force for market change and widespread concern
    over the environmental impact of pesticides favours CTS' technology.


   •Increasing concern over bed bugs and wide use of certain antimicrobials:
    reappearance of bed bugs in the developed world has presented new challenges
    for pest controllers. More and more traditional insecticides are being
    banned such as some organophosphates and there is increasing reluctance to
   •Accept the spraying of residual insecticides directly onto bedding
    materials to eliminate bed bugs. A recent independent study in the UK
    demonstrated Cryonite's effectiveness in exterminating bed bugs. In
    addition, several recent studies have highlighted substantial potential
    risks associated with widely used disinfection and sanitisation agents.


   •Increasing concern over risk of contamination in the food preparation
    industry: the food preparation industry recognises the threat from microbial
    contamination. In this state of raised awareness, the Directors and the
    Proposed Director believe that CTS' technology, which provides enhanced pest
    control using non-toxic agents with its patented physical process, has the
    performance to combat pest threats and offers reassurance to the food
    preparation industry.

Third party tests and commercial trials

Cryonite has undergone extensive efficacy and safety tests with a number of
third party agencies and institutions in order to support its claims and gain
approval for sales into specific markets. The claims made in respect of CTS'
existing products are substantiated by test data and/or validations from
independent organisations and PCOs including Insect Investigation UK Ltd,
Kenniscentrum Dierplagen (KAD), Anticimex AB and Ikari Corporation.

In these tests, Cryonite has been shown to be effective against a broad spectrum
of pest targets including bed bugs, wasps, German cockroaches, £our beetles,
moths, crickets, chicken mites, saw-toothed grain beetles and tobacco beetles
and the Directors and the Proposed Director are confident that additional
testing will show the method to be effective against a wide range of additional
pests with similar characteristics. In addition to the sales that have been made
as part of CTS' test marketing to date, successful commercial trials have been
completed with potential customers including leading food manufacturing/
processing companies, tobacco companies and other large companies.

CTS, through its distribution partners, is in discussions with PCOs that service
a number of hotel management companies with a view to demonstrating the efficacy
of Cryonite in the lodging environment, particularly against bed bugs. The
Directors and the Proposed Director believe CTS' technology can considerably
enhance the effectiveness of existing hygiene practices and that this will be
attractive to hotel management companies because there would be no requirement 
to close rooms during disinfestations or change operating practices.

Sales and marketing

Initial sales of CTS' products have been made to PCOs and food production
companies in a number of territories but have been limited in scale by CTS'
resources. With these sales demonstrating the commercial viability of Cryonite,
CTS has identified significant customer demand and is initially targeting the
food
manufacturing/processing sectors as well as the hotel and leisure sectors.
However, the Directors and the Proposed Director have identified wider
applications for the technology which could include the use as a replacement for
liquid residual insecticides in sensitive environments such as schools and the
healthcare sector.

Given the fragmented structure of the global pest control market, CTS has
favoured a distribution partner approach to an internal sales organisation. As
such, CTS has established a licensing and co-operation agreement with Linde, a
major European gas provider for Western Europe, signed distribution agreements
with various PCOs and complemented this strategy through an awareness building
effort:

   •AGA/Linde: An exclusive licensing and co-operation agreement was entered
    into with AGA, now a Swedish subsidiary of Linde, in September 2004
    regarding the Nordic Region and the UK. This cooperation agreement was
    extended in November 2005 to include further Western European countries
    including the Benelux, Germany, France, Italy and Switzerland. AGA/Linde
    takes operating control of the partnership, thereby supporting CTS in the
    production of marketing/educational material, building the necessary
    logistics and IT infrastructure as well as being responsible for the
    marketing/sales effort in these markets. CTS in turn sells on the Cryonite
    unit to AGA/Linde at cost including a margin, who package the unit with the
    carbon dioxide cylinder and lease it to leading European PCOs, hygiene
    companies and food companies. CTS shares in the profits on the gas and
    leasing contract above a specified threshold. CTS is currently considering
    establishing similar partnerships with leading gas companies targeting the
    North American and Asian (excluding South Korea and Japan) markets.


   •Distribution partners: AGA/Linde and CTS have arrangements in place with
    a number of distribution partners in specific markets and geographical
    areas. As part of the development strategy, the Directors and Proposed
    Director intend to enter into agreements with additional distribution
    partners with established sales and marketing channels. These distribution
    partners supplement the sales and marketing efforts conducted by AGA/Linde
    in those markets where it is present. Distribution partners include Killgerm
    GmbH (Germany), Semco Limited (Japan) and RIWA Ltd (UK). In addition, CTS
    has entered into advanced discussions with potential distribution partners
    in the US, the Benelux, Italy and Australia.


   •Awareness building: An indirect way to encourage sales is through
    awareness and brand building. This is primarily done through the education
    of the associated benefits by using the Cryonite method to independent
    organisations, PCOs, food processors/manufacturers, hotel management
    companies and other target markets.


Manufacturing and logistics

The Cryonite equipment consists of a trolley, a lance with a trigger mechanism,
a pressure hose, a jet nozzle and a carbon dioxide gas cylinder. The process by
which CTS' products are manufactured involves the use of both standard
components as well as custom-made components that require high precision
machinery.
Manufacturing is subcontracted to Pinol A/S (''Pinol''), a Denmark-based
specialist in precision manufacturing and assembly. Pinol is responsible for
organising the subcontracting of parts, final product assembly, quality
assurance, labelling and packaging. Current annual production capacity is
estimated to be in excess of 1,000 units. In November 2005, Pinol was acquired
by AB Westergyllen. As a result of this change of ownership and an associated 
change in strategy and product focus, Pinol intends to cease production of the 
Cryonite equipment but has identified its own outsourced provider. Pinol has, 
however, agreed with CTS that it will continue to be responsible for the 
production, supply and quality of Cryonite units by that outsourced provided 
until the end of 2008, or such earlier time as CTS finds an acceptable 
alternative supplier. CTS' partner AGA/Linde is using a distribution warehouse 
for Cryonite in ArjTM?ng, Sweden, thereby assisting CTS in the transport 
logistics of units on a global basis.

Strategy

CTS intends to maximise the current market potential for its pest control
products. To accomplish this, CTS is currently focusing on three primary
strategic initiatives:

   •developing existing markets and expanding international reach
   •enhancing existing product portfolio through new product development
   •growth through selective acquisitions of complementary businesses.

Whilst CTS' short-term marketing efforts will concentrate on Europe and Asia to
develop those markets in which it is already present as well as North America,
the Directors and the Proposed Director believe that the Company will be able,
in due course, to expand its organisation into further potential markets as and
when
appropriate.

The Directors and Proposed Director are confident of the organic growth
potential of CTS' environmentally friendly pest control business. CTS will
continue to invest in new product development to further refine its products as
well as develop new ones. While remaining focused on organic growth, CTS will
explore any appropriate acquisition opportunities presented to it. Venteco will
maintain its initial strategy following the acquisition of CTS using the Company
as a vehicle to identify and acquire or invest in one or more businesses that
are suitably positioned to take advantage of the growth opportunities that exist
within the environmentally friendly pest control and related markets.
Investments may be made in innovative environmental pest control technologies or
in related sectors and may be made by the Company directly or through wholly or
majority controlled subsidiary companies such as CTS.

Directors, key employees and key consultants

Stefan Bo Hansson is the CEO of CTS. He is supported by Johan Siwerth, CTS'
operations director. CTS currently has no further employees. CTS also instructs
from time to time external patent consultants to examine how the patent
situation could be further strengthened, as well as consultants working on
engineering related issues. Bertil Eliasson, one of the original inventors of
the Cryonite technology, and Lennart Carlsson are both active in this respect.

Johan Siwerth, Operations Director of CTS (aged 41)
Johan has studied Chemistry at the Royal Institute of Technology in Stockholm
and has completed extensive studies in Geology. He is responsible for the IT and
logistics infrastructure at CTS, while also assisting in any technical
development and patent related issues.

Lennart Carlsson, Consultant R&D and engineering (aged 51)
Lennart obtained an M.Sc in Electrical Engineering from Chalmers University,
Gothenburg. He remains active within CTS as a consultant in areas related to
intellectual property and product development. He currently holds the position
as Head of R&D at Ospol AB, a dental implant start-up. Previously, he held
various R&D positions within the life sciences industry including AstraZeneca
plc, Nobel Biocare AB, developer of innovative esthetic dental solutions,
Cochlear Limited (previously Entific Medical Systems AB), an Australian/Swedish
hearing aid company, as well as Biolin AB, a Swedish venture capital company
specialising in investing in early stage companies in high tech companies within
life sciences and related fields. Lennart is also a board member Pronimic AB and
a member of the MDD Steering Committee at the Swedish Test and Research
Institute. He has also served as chairman of the Swedish National Biomaterials
Consortium.

Bertil Eliasson, Co-Inventor and consultant R&D and engineering (aged 55)
Bertil holds a B.Sc in Chemistry and Biology from Gothenburg University and
remains active within the academic spheres. Being the co-inventor of the
Cryonite technology, he remains closely involved in the continued development
and refinement of the technology and methodology.

The Directors have confirmed that the existing employment contracts, including
any pension rights, of all employees of CTS will be fully safeguarded and that
there will be no material change to the business activities of CTS.

Terms of the Acquisition

Venteco is proposing to acquire the entire issued share capital of CTS for £7.4
million to be satisfied through the issue of 227,692,308 Consideration Shares of
0.5p at 3.25p per share. The Acquisition Agreement has been entered into by
certain of the Vendors, holding, in aggregate 809,552 shares of CHF0.10 and
438,870 shares of CHF0.03 in the capital of CTS (representing 77.1 per cent. of
CTS' entire issued share capital).

The remaining Vendors (representing 22.9 per cent. of CTS' entire issued share
capital) have entered into sale agreements with Venteco pursuant to which they
have agreed, subject, inter alia, to Admission, to sell their shares in CTS to
Venteco. The sale agreements contain customary warranties as to ownership and
good title
in favour of Venteco. The sale agreements also contain a power of attorney in
favour of the CTS directors pursuant to which the attorney may sign and deliver
any documents required to transfer title in the shares in CTS to Venteco.

The Acquisition is conditional, inter alia, upon approval by Shareholders as,
under the AIM Rules, the Acquisition is classified as a reverse takeover on
account of CTS' size relative to that of Venteco. In addition, the Acquisition
is conditional upon the necessary Resolutions being passed at the Extraordinary
General Meeting and Admission.

Financial information on CTS

The following table sets out key financial information relating to CTS for the
period from 6 December 2004 to 31 December 2005. The figures for revenue, loss
from operations and net loss for the period have been extracted without material
adjustment from the accountant's report on CTS, set out in Part III, Section D
of the admission document.

                                                                 6 December 2004
                                                             to 31 December 2005
                                                                           £'000
Revenue                                                                      249
Loss from operations                                                       (246)
Net loss for the period                                                    (221)

CTS' current trading continues to be in line with management expectations for
the current financial year to 31 December 2006.

Financial information on Venteco

Since 7 March 2006 when its shares were admitted to trading on AIM, Venteco has
operated as an investing company with no trading business. As at 30 April 2006,
Venteco had cash balances of £3.0 million and net assets of £3.0 million. The
unaudited results of Venteco for the period from incorporation to 30 April 2006
are incorporated in Part III, Section B of this document and in the accompanying
reports and accounts.

City Code on Takeovers and Mergers

The directors of CTS and certain former directors of CTS are deemed to be a
Concert Party for the purposes of the City Code due to their position as Vendors
and their relationship with each other. At Admission, the shareholding of the
Concert Party will be, in aggregate, 92,411,037 Ordinary Shares, representing
approximately 26.5 per cent. of the Enlarged Issued Share Capital of the
Company. As the members of the Concert Party will between them hold less than 
30 per cent. of the Enlarged Issued Share Capital following completion of the
Acquisition and Admission, dispensation from Rule 9 of the City Code will not be
required. For so long as they continue to be treated as acting in concert,
members of the Concert Party may be able to increase their aggregate
shareholding up to but not through a Rule 9 threshold
without incurring any obligation under Rule 9 to make a general offer for the
Company.

Related party transaction

The Acquisition is a related party transaction for the purposes of Rule 13 of
the AIM Rules. The related parties are Stefan Bo Hansson, Chief Executive of CTS
and Proposed Director, Mats Lennart Andersson, Chairman of CTS and the Company
and Per Ragnar Thanner. Under the Acquisition, Stefan Bo Hansson, Per Ragnar
Thanner and Mats Lennart Andersson will sell their shares in CTS (250,108
shares, 156,859 shares and 35,615 shares respectively) to the Company for
consideration of £1,517,048.52, £951,439.84 and £216,025.41 respectively, to be
satisfied by the issue by the Company of 46,678,416, 29,275,072 and 6,646,936
Consideration Shares respectively.

In this regard, the Independent Non-Executive Directors (being John
Andrew Franklin and Haresh Damodar Kanabar) having consulted with Libertas
Capital, consider the terms of the Acquisition to be fair and reasonable and
recommend the Acquisition as set out in paragraph 17 below.

Directors and Proposed Director

The Board of the Enlarged Group will initially comprise one executive Director
and four non-executive Directors. Details of the Directors and the Proposed
Director, their service agreements with the Company and, in the case of
non-executive Directors, their letters of appointment, are set out in paragraph
7 of Part IV of the admission document. On completion of the Acquisition, the
Proposed Director will be appointed to the Board. Brief biographies of the
Directors and the Proposed Director and their positions on the Board on
completion of the Acquisition are set out below.

Mats Lennart Andersson, Chairman (aged 57)
Mats Andersson obtained a B.Sc in Economics from the University of Gothenburg.
From 1980 to 1987 he worked as Marketing Director of Telia AB. He joined
Conductor AB as chief executive in 1988, a position he held until 1995 when he
became CEO of Anticimex AB, the Swedish-based company offering services in the
areas of building environment, pest control and hygiene. He has held board
positions on ServiceMaster Nordic, Anticimex AB and ProSanitas AB, a
certification body that carries out hygiene certification for the food and
food-packaging industries in Europe. Mats Andersson held a government advisory
position as Chairman in the evaluation of Sweden's future need of
Telecommunications and was on the advisory board of Telia AB. Mats Andersson
currently serves as Non-Executive Chairman on the Board of CTS.

Dr. Peter Karl Cottee, Non-Executive Director (aged 48)
Dr. Peter Cottee obtained a B.Sc in Zoology from the University of Aberdeen as
well as a Ph.D in Insect Physiology from the Centre for Overseas Pest Research
from the University of Aberdeen. From 1982 to 1992 he worked for the
international business services company Rentokil Initial plc (then known as
Rentokil Group Ltd). He held various positions within the pest control segment
as general manager of Rentokil
Kenya running the pest control and hygiene operations, as president of Rentokil
Canada running its pest control, hygiene and tropical plant rental operations as
well as a position within its R&D division. In 1992 he joined The ServiceMaster
Company (''ServiceMaster'') as business development consultant with
responsibility for European acquisitions. Following his appointment as managing
director of
ServiceMaster's pest control subsidiary Terminix, in Holland, he took on the
role of managing director for Terminix Europe, managing a 100 million business
operating in 7 European countries. Currently, Dr Peter Cottee is managing
director and owner of RIWA Ltd following the management buyout from Terminix
Europe. RIWA Ltd manufactures the leading Insect-O-Cutor brand of flying insect
killers and fly screens
with customers in over 25 countries. The company also supplies a complete range
of pest control products and equipment to over 250 pest control companies in the
UK.

John Andrew Franklin, Non-Executive Director (aged 62)
John Franklin qualified as a solicitor with Slaughter and May in 1968. From 1972
to 1994 he worked for the merchant bank Morgan Grenfell & Co. and held various
senior positions in banking and corporate finance, including specialising in
banks, building societies and insurance companies. He also headed the New York
office from 1980 to 1984. In 1994 he joined Fox-Pitt, Kelton Ltd. as a corporate
finance director specialising in the financial services sector on an
international basis. Following the acquisition of Fox-Pitt, Kelton Ltd. by Swiss
Re in 1999, he was seconded in 2000 to do internal investment banking and
private equity at Swiss
Re. He was also responsible for investments in emerging markets. Since his
retirement in 2003, John has worked as a special adviser to Trans-Siberian Gold
Plc and co-ordinated its flotation in 2003. He maintains other advisory and
directorship roles.

Haresh Damodar Kanabar, Non-Executive Director (aged 48)
Haresh Kanabar qualified as a certified accountant in 1986. Following a number
of finance positions with Fisons plc, Reed International plc and Texas Homecare
Limited he became a finance director of F E Barber Limited, a subsidiary of
Hillsdown Holdings Limited in 1994. In 1997 he was appointed group finance
director of Whitchurch Group plc, which he left in May 1998 to become finance
director of TMV Finance Limited. In December 1999 he left to start Corvus
Capital Inc. as chief executive. Haresh is currently chief executive of Blue
Star Capital plc and also Gasol plc, he is a non-executive chairman of India
Outsourcing Services plc and Silentpoint plc. He is also a director of Aurum
Mining plc, Black Raven Properties plc and Asia Capital plc.

Stefan Bo Hansson, Proposed Chief Executive (aged 39)
Stefan joined Biolin AB in 2000, a Swedish venture capital company, as head of
investments and financing, specialising in investing in early stage companies in
high tech companies within life sciences and related fields. During his time at
Biolin, he was a board member in a number of Biolins' holdings, including
Sinterkil, of
which he was appointed CEO during 2002. In the latter part of 2004, Sinterkil
sold all its intellectual property and rights relating to Cryonite to CTS
Technologies in Switzerland - Stefan retained his position as board member and
CEO in the new company. Previously, Stefan was an equity analyst for 15 years
and his experience included co-founding ABG Securities in 1997 (now ABG Sundal
Collier, listed on the Norwegian stock exchange) as well as being appointed as
co-head of Swedish equity research and to the management committee at Enskilda
Fondkommission in Stockholm (owned by SEB). He gained a B.Sc in business
administration from the Stockholm University in 1990. Paragraph 7 of Part IV of
this document contains further details of the current and past directorships and
certain other important information regarding the Directors and Proposed
Director of the Company.

As at 12 July 2006 Venteco had no employees.

Lock-in and orderly market arrangement

Following Admission, the Directors, Proposed Director, other related parties and
persons connected and/or associated with them will be interested, in aggregate,
in 113,091,409 Ordinary Shares representing approximately 32.42 per cent. of the
Enlarged Issued Share Capital. Details of these shareholdings are set out in
paragraph 6 of Part IV of this document. Under the terms of the Lock-in
Agreement each of the Directors, Proposed Director, other related parties and
applicable employees (each as defined in the AIM Rules) have undertaken with the
Company and Libertas Capital that, save in certain limited circumstances, they
will not dispose of any interest in any Ordinary Shares held by them for a 
period of twelve months from Admission.

After the expiry of such period, the Directors have agreed that any sale or
disposal of Ordinary Shares by the Directors or Proposed Director will only be
effected through Libertas Capital for so long as it remains the Company's
broker.

Share option scheme

The Directors and Proposed Director consider that an important part of the
Group's remuneration policy should include equity incentives through the grant
of share options to Directors and employees. The Directors and Proposed Director
intend to adopt an employee share option scheme pursuant to which options to
acquire Ordinary Shares may be granted to Directors and employees of the
Company. It is expected that the total number of Shares under option under the 
scheme, if implemented, will represent a maximum of 10 per cent. of the 
Company's issued ordinary share capital from time to time.

Dividend policy

The Directors and Proposed Director currently intend to apply the Group's cash
resources to invest in the growth of its operations and therefore do not
anticipate paying dividends in the near future. They will reconsider the
Company's dividend policy as and when the Company is in a position to pay
dividends. The declaration and payment by the Company of any dividends will
depend on the results of the Group's operations, its financial condition, cash
requirements, future prospects, profits available for distribution and other
factors deemed to be relevant at the time.

Corporate Governance

The Directors and Proposed Director recognise the importance of sound corporate
governance. The Directors and Proposed Director intend to comply with the
Combined Code Principles of Good Governance and Code of Best Practice taking
into account the Company's size and stage of development.

An audit committee, comprising John Franklin, Haresh Kanabar and Mats Andersson,
has been established to determine the application of the financial reporting and
internal control principles, including reviewing the effectiveness of the
Group's financial reporting, internal control and risk management procedures and
the scope, quality and results of the external audit. The audit committee is
chaired by John Franklin.

A remuneration committee, comprising John Franklin, Haresh Kanabar and Mats
Andersson, has been established to review the performance of the executive
directors and will set their remuneration and consider bonus and share options
schemes. No Director or Proposed Director will take part in discussions
concerning their own remuneration. The remuneration committee is chaired by John
Franklin.
The Company has adopted the Model Code for directors' share dealings which is
appropriate for a company whose shares are traded on AIM. The Directors and
Proposed Director will comply with Rule 21 of the AIM Rules relating to
directors' dealings and will take all reasonable steps to ensure compliance by
the Group's
applicable employees as well.

Extraordinary General Meeting

At the end of this document you will find a notice convening an Extraordinary
General Meeting of the Company to be held at the offices of Dechert LLP, 160
Queen Victoria Street, London EC4V 4QQ at 10:00 a.m. on 7 August 2006 at which
the following resolutions will be proposed:

1)      to approve the Acquisition as a reverse takeover for the purposes of
Rule 14 of the AIM Rules; to increase the authorised share capital from
£2,500,000 to £3,500,000 by the creation of 200,000,000 new ordinary Shares; to
give the directors of the Company from time to time the authority to allot
relevant securities pursuant to the Acquisition and, in addition, up to an
aggregate nominal amount of £581,431, representing up to 116,286,200 Ordinary
Shares or 33.3 per cent. of the Enlarged Issued Share Capital in the Company;
and
2)      a special resolution to authorise the Directors to allot relevant
securities for cash representing up to 34,885,800 Ordinary Shares or 10.0 per
cent. of the Enlarged Issued Shared Capital as if the statutory pre-emption
rights set out in section 89 of the Act did not apply to such allotment.

CREST

CREST is a paperless settlement system enabling securities to be evidenced
otherwise than by a certificate and transferred otherwise than by written
instrument. In accordance with standard practice the Consideration Shares will
be made eligible for settlement in CREST in accordance with CREST Regulations.

CREST is a voluntary system and Shareholders who wish to receive and retain
share certificates will be able to do so.

Additional information

Your attention is drawn to the information contained in Parts II to IV of this
document which provides additional information on the Group. In particular, you
are advised to carefully consider Part II of this document, entitled ''Risk
Factors''.

Recommendation

The Independent Non-Executive Directors, who have been so advised by Libertas
Capital Corporate Finance, consider the terms of the Acquisition to be fair and
reasonable and in the best interests of Shareholders as a whole. In giving its
advice, Libertas Capital Corporate Finance has taken into account the Directors'
commercial assessment. Accordingly, the Directors unanimously recommend
Shareholders to vote in favour of the Resolutions to be proposed at the
Extraordinary General Meeting, as they intend to do in respect of their
shareholdings of 13,066,666 Existing Ordinary Shares in aggregate representing
approximately 10.8 per cent. of the existing issued ordinary share capital of
the Company.

Restoration of Trading on AIM

The document containing information regarding the Acquisition will be posted to 
shareholders today and copies of the document are available from the offices of 
Libertas Capital Group plc, 16 Berkeley Street, London W1J 8DZ.

As the document is now available, the Company anticipates that dealings in the 
Company's ordinary shares will be restored at 10.30 am today.








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