RCR pays up to $21 million for Applied Laser

December 11--RCR Tomlinson Ltd. has reached an agreement to purchase the business and assets of the Applied Laser Group of companies, which has laser cutting operations in Queensland, Victoria, New South Wales, and South Australia.

December 11--RCR Tomlinson Ltd. has reached an agreement to purchase the business and assets of the Applied Laser group of companies, which has laser cutting operations in Queensland, Victoria, New South Wales, and South Australia.

This acquisition builds on RCR's existing laser cutting operations in Western Australia and Queensland, and enables RCR to provide clients with national laser cutting services, across a broad range of industry sectors.

The Applied Laser Group services industries as diverse as aerospace and defense, agriculture and mining, and electrical and electronics manufacturers.

The consideration to be paid by RCR to the vendors of the Applied Laser Group is calculated on a sliding scale, with the final amount being calculated by reference to the EBIT earned in respect of the 12 month period to January 1, 2008. The final consideration paid by RCR will be cash only, or cash and shares, as specified below.

RCR will pay $12.2 million in cash to the vendors upon settlement, anticipated to be early January 2007.

This minimum purchase price represents a multiple of approximately 4.4 times EBIT. For EBIT between $2.75 million and $5.25 million RCR shares will be allotted on a sliding scale.

The maximum purchase payable by RCR is $21 million, of which $12.2 million will be paid in cash and up to 4,000,000 RCR ordinary fully paid shares at $2.20 per RCR share. This maximum purchase price represents a multiple of four times EBIT of $5.25 million.

The management team of the Applied Laser Group will continue to run the business during the earn out period.

The acquisition is subject to RCR and the Applied Laser Group executing final documentation, which RCR anticipates will be completed by end of December or early January.

The acquisition of the Applied Laser Group will be funded from internal resources and existing facilities.

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