ann out: very positive

Wednesday 14th February 2007
ANNOUNCEMENT
Sale Agreement Reached With Procontrol Systems and Open Day Invitation
Safety Medical Products Ltd (SafetyMed) is pleased to announce the signing of a Sale Agreement
for the purchase of Automation Engineering Company ProControl Systems.
The original agreement being for $500,000 in cash and $1million worth of SafetyMed shares was
altered and agreed by the parties to be payable in full in SafetyMed shares on the basis of
1.5million SafetyMed shares at an issue price of $1.00 each.
As previously advised ProControl has a turnover of $1.5m and EBITDA of $500K.
Final terms were agreed to on Friday 9th of February when the share price was $1.08 and the slight
discount arrived at is due to the agreement to bring forward the settlement date on the transaction
and the removal of the $500,000 cash component.
This deal enables the acquisition to take place whilst preserving SafetyMed’s cash position and
shows further confidence by ProControl in the Company and its future prospects.
The acquisition also gives the Company its first real revenues, with ambitions to increase all same
to bring the Company into profits with further logical acquisitions as soon as we can.
Adelaide-based ProControl Systems was founded in 1983 and has specialist expertise in Industrial
Control and Process Automation, PLC Programming, SCADA/HMI Development, Drives Systems,
Robotics, Vision Systems, Electrical Design and Installation, Commissioning, 2D and 3D CAD
Drafting, Turnkey Projects and Radio Frequency Identification.
The ProControl client base covers a wide and diverse range of industries including Wine, Waste
Treatment, Automotive, Mining, Gas, Cement, Pulp and Paper, Steel, Bottling, Medical and
Pharmaceutical industries.
This is a significant acquisition for the Company and comes at a time when ProControl has almost
completed building and testing the Company’s first automated assembly machine for the
Safetymed SecureTouch Retractable Syringe.
Following completion of the first machine Safetymed expects to have further machines built with
even larger capacity, as well as expanding the SecureTouch range to include the full range of
gauges of 2,3,5 and 10ml size safety syringes.
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Economical Production Processes will also need to be devised for the Company’s MediTag and
Freeze Indicator products during 2007, all of which fall within the scope of ProControl’s expertise.
The significant investment required to develop all of the abovementioned equipment indicated that
it made good commercial sense for SafetyMed to instead purchase ProControl, thus absorbing
their applicable margins and recouping some expenditure.
This acquisition also gives SafetyMed full security and ownership of all the associated IP that is
developed.
ProControl Systems will continue to run as a separate division of SafetyMed, with Director Mr.
Robert Doley contracted to remain with the company for at least the next three years as General
Manager in charge of ProControl and his existing team of engineers. This will ensure a smooth
transition with no disruption to the client base or business structure as a result.
SafetyMed intends to relocate ProControl to the Company’s Salisbury Plain facility to take
advantage of available synergies and costs savings.
The Company also believes there are further growth opportunities in this sector throughout both
Australia and New Zealand and will explore these following settlement.
Safetymed is actively seeking other logical acquisition opportunities that can be similarly vertically
integrated into the Company’s business plan, to not only provide additional income streams but
also aid directly with the growth of the business by providing either further appropriate products
and services or further avenues into markets for the SafetyMed product range.
OPEN DAY
Safety Medical Products would also like to invite Shareholders, members of the public and any
other interested parties to its’ open day on Monday 5th March 2007 at the Salisbury Plain Facility.
The new Securetouch Retractable Syringe Automated Assembly Machine will be in full operation
and able to be viewed during the course of the day.
This will be an opportunity to view the new equipment in action before its relocation to Korea
shortly thereafter for installation and integration at the Exelint factory in Korea in preparation for
commencement of production later next month.
The complete range of products will also be on display as well as your board of Directors and the
Medical Advisory Committee being available to discuss the progress of the company with visitors.
Anyone interested in attending must register their interest by email or in writing to the company as
only those registered will be permitted to attend.
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For security reasons, mobile phones or any other photographic
equipment will not be permitted other than that brought in by the media.
Safety Medical Products Open Day
Monday 5th March, 2007
3pm-7pm
25 Fenden Road
Salisbury Plain, 5109
Email: [email protected] or mail to the above address
Yours faithfully,
John Riemelmoser
Managing Director