Investment in Revolve Performance Limited
19 June 2015
Vela Technologies plc
("Vela" or the "Company")
Investment in Revolve Performance Limited
The Board of Vela (AIM: VELA), the investing company focused on early stage and pre-IPO disruptive technology investments, is pleased to announce that the Company has invested £50,000 in Revolve Performance Limited ("Revolve Performance").
Revolve Performance is a newly incorporated company that has acquired 100% of the share capital of Nitec Limited, a non-operating holding company that owns 100% of the UK operating company, Revolve Technologies Limited ("Revolve Technologies"), and 91% of Mountune LLC, the US operating company.
Revolve Technologies is a long-established and profitable specialist powertrain and performance engineering group that owns a leading performance parts brand, Mountune. The Mountune division, whose products are used by consumers and racing teams to enhance engine performance, has grown rapidly in the UK as well as in the US, where it was launched in 2013, with exclusive access to the Ford dealership network in both territories.
Mountune is the only European third-party provider of performance parts that does not affect the Ford warranty. Following a further agreement, Mountune extended its activities with Ford to cover the US and Canada. Ford US have announced development programs for 12 new performance vehicles in North America over the coming few years which, when combined with the introduction this year of the Mustang into Europe, would suggest that Mountune is about to enter a strong growth phase in its business. Mountune also expects to extend its OEM activities with the addition of further brands. In addition, the board of Vela has been advised by Revolve of two multi-year projects that are in the pipeline in the engineering division which, if secured, would supplement the growth being experienced at Mountune.
Revolve Performance has raised £1.5 million through an equity investment to support expansion in the US and £1.5 million through a loan investment which will be used mainly to refinance existing debt and capital expenditure in the UK. Vela has invested £50,000 in the equity investment round for a minority interest in the share capital of Revolve Performance.
Revolve Performance was incorporated on 17th April 2015 for the purposes of the transaction and has therefore not produced any accounts to date. For the year ended 31 December 2014, Nitec Limited generated revenue of £7.82 million and an operating profit of £0.20 million. Net assets of Nitec Limited as at 31 December 2014 were £2.22 million. Results for the first quarter of 2015 were ahead of internal forecasts with sales at Mountune LLC at record levels and growing.
Commenting on the investment, Brent Fitzpatrick (Non-Executive Chairman) and Antony Laiker (Executive Director), said:
"Revolve Performance is an ideal fit for our investment criteria. Mountune is differentiated by technical effectiveness whether with Ford as it grows its model range in the North America and Europe or with its activities with successful racing teams. Meanwhile, the engineering division is seeing increased demand from major vehicle manufacturers who look to companies like Revolve to help drive technical choices in, for example, hybrid vehicles. The group also owns significant intellectual properties in systems to integrate hydrogen fuel into diesel engines leading to reduced carbon emissions and improving fuel efficiency.
Going forward, the board of Revolve Performance anticipates that a substantial percentage of the growth of the business will emanate from the Mountune performance parts business both in the UK and the US as Ford continues its "One Ford" strategy. We look forward to keeping shareholders apprised of developments in our new investment."
A link to the press release published by Rockpool Investments LLP on Revolve Performance's investment round can be found here:
http://www.rns-pdf.londonstockexchange.com/rns/6277Q_-2015-6-18.pdf
For further information please contact:
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This information is provided by RNS
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