TIDMSPRP
RNS Number : 1317B
Sprue Aegis plc
31 March 2017
31 March 2017
Sprue Aegis plc
("Sprue" or the "Company")
Distribution and Manufacturing Agreements update
-- Each of Distribution and Manufacturing and Supply Agreements
with Newell Brands to be terminated
-- Sprue's obligation to pay the fixed annual distribution fee of GBP2.9m ends on 31 March 2018
-- Signed transformational manufacturing agreement with Flex
-- Signed a separate agreement with a leading Far Eastern
manufacturer to supply replacement products to the BRK range
Sprue (AIM: SPRP), one of Europe's leading developers and
suppliers of home safety products, today announces the following
update relating to its Distribution and Manufacturing and Supply
Agreements.
Distribution Agreement ("DA") and Manufacturing Agreement
("MA")
Sprue announces that it has received the requisite 12 months'
written notice from Newell Brands Inc. ("Newell"), to terminate the
distribution agreement entered into between Sprue and BRK Brands
Europe Limited ("BRK") dated 10 April 2010 which was extended by
both parties for a further three years from 1 April 2015. The DA
will terminate on 31 March 2018.
Expiry of the 12 months' notice period on the DA will end
Sprue's obligation to pay the fixed BRK annual distribution fee of
GBP2.9m and Sprue's right to distribute BRK's products and brands
in Europe, both with effect from 31 March 2018.
Sprue announces that it has also received the requisite 12
months' written notice from Newell to terminate its manufacturing
and supply agreement with DTL. The MA will terminate on 31 March
2018.
While Newell has given notice to terminate the DA and MA, Sprue
will continue to purchase and source products under both agreements
until 31 March 2018, and honour its contractual commitments.
Commenting, Mark Tarchetti, President of Newell Brands,
said:
"Having considered various different options with Sprue, it
became clear that the best interests of both parties would be
served by Sprue and Newell going their separate ways. Newell
therefore decided to serve the requisite 12 months' written notice
on Sprue to terminate both the BRK Distribution Agreement and the
DTL Manufacturing Agreement. Newell will of course honor any
contractual commitments and we intend to work with Sprue on an
orderly transition. We wish the Sprue Board well with their future
plans."
Appointment of two new strategic manufacturing partners
The Company is pleased to announce that it has today entered
into a manufacturing and supply agreement ("MSA") with Flex to
source a range of smoke and heat alarms and accessories from the
Flex facility in Tczew, Poland.
With approximately 200,000 professionals across 30 countries,
Flex is the Sketch-to-Scale(TM) solutions provider that designs,
manufactures and distributes Intelligent Products for a Connected
World(TM). For more information, visit www.flex.com.
The Company has also entered into an additional supply agreement
with a leading manufacturer based in the Far East to purchase
alternatives to the BRK products.
As previously announced, Sprue will announce its audited final
results for the year ended 31 December 2016 on 4 April 2017.
Graham Whitworth, Executive Chairman of Sprue, commented:
"We are delighted to announce the appointment of two new
manufacturing partners which will significantly increase Sprue's
scale and value proposition. We do not expect any significant
disruption to the supply chain as we transition to source products
from our new manufacturing partners.
Whilst the relationship between Sprue and Newell was successful,
moving forwards the changes we have announced today will allow
Sprue to focus more on developing its core and emerging technology
strategy. With its global manufacturing footprint and extensive
manufacturing experience, we believe Flex is well positioned to
help Sprue expand its addressable markets beyond Europe. Combined
expertise with greater independence is expected to accelerate
development of new products and growth with greater control.
During this exciting new transitional period of our business
development, we will continue to work closely with all of our
stakeholders and believe the changes outlined today will
significantly enhance shareholder value."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information, please contact:
Sprue Aegis plc 02477 717700
Graham Whitworth, Executive
Chairman
Neil Smith, Group Chief Executive
John Gahan, Group Finance Director
Stockdale Securities 0207 601 6100
Tom Griffiths
Vigo Communications 020 7830 9700
Jeremy Garcia / Fiona Henson
/ Antonia Pollock
Notes to Editors
About Sprue Aegis plc
Sprue's mission is to protect, save and improve our customers'
lives by making innovative, leading edge technology simple and
accessible. Sprue is one of the market leaders in the European home
safety products market and launched its own connected homes product
proposition at the end of 2016.
Sprue's principal products are smoke alarms, CO alarms and
accessories. The Group has an extensive portfolio of patented
intellectual property in Europe, the US and other selected
territories. Products are sold under Sprue's leading brands of
FireAngel, FireAngel Pro, FireAngel Spec, AngelEye and FireAngel
Connect.
For further product information, please visit: www.sprue.com
This information is provided by RNS
The company news service from the London Stock Exchange
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