White Eagle Reasources (ASX:WEG) has entered into a binding term...

White Eagle Reasources (ASX:WEG) has entered into a binding term sheet to acquire up to 100% of Lunalite International.

Lunalite operates in the digital outdoor media sector and has designed, installed and tested one of the world’s first Cross Track Digital Media systems using large format LED screens to replace the current static print cross track media posters found in rail stations.

Lunalite has been awarded a 7 year contract by Metro Trains Melbourne, the operator of the Melbourne rail network, to install and operate 32 screens across its 3 underground rail stations.

Lunalite has appointed APN Outdoor as its exclusive sales agent in respect of the Melbourne Contract for an initial period of 12 months.

The 32 screens in Melbourne are expected to be installed, fully operational and generating revenue for Lunalite by October 2014.

Lunalite has been awarded a separate contract for up to 7 years by Queensland Rail, the operator of the Queensland rail network, to install and operate 15 screens across 5 stations, which are expected to be generating revenue by May 2015.

The company is currently developing a complementary mobile phone ‘App’ which leverages its server platform to provide a personalised rail security and direct advertising capability.

White Eagle is to acquire Lunalite for a deemed upfront consideration of $2.6 million to be satisfied through the issue of 520 million fully paid ordinary shares in White Eagle.

Another 380 million Performance Shares will be issued, which will convert to ordinary shares upon the achievement of the certain milestones.

Lunalite has already commenced the installation of the Melbourne Contract and estimate a total cost to complete of $3.5 million.

This will be part funded via a capital raising to be undertaken directly in Lunalite with the balance to be funded by White Eagle once the Transaction completes.

In conjunction with the installation and commissioning of the Melbourne and Queensland Contracts, Lunalite is undertaking further discussions with various international rail operators and media groups regarding the potential roll out of its system on international rail networks.

The Transaction is subject to a number of conditions being satisfied, including completion of a capital raising by Lunalite of at least $2.65 million; White Eagle raising a minimum of $1 million in conjunction with re-complying with Chapters 1 & 2 of the ASX Listing Rules; and White Eagle shareholder approval.

As part of the transaction, the Company will seek the approval of shareholders to change its name to XTD Limited.