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VANCOUVER, Nov. 7, 2018 /CNW/ - UrtheCast Corp. (TSX: UR) ("UrtheCast") announced that it has entered into a definitive purchase agreement (the "Purchase Agreement") with Land O'Lakes Inc. ("Land O'Lakes") for the acquisition of its wholly owned subsidiary, Geosys Technology Holding LLC ("Geosys"), and certain of its intellectual property (the "Geosys IP") related to software for accessing, processing, cataloguing and retrieving of images, on substantially the same terms and conditions set forth in the binding letter of intent announced on August 14, 2018. UrtheCast also confirmed that, upon first closing, the Company would enter into a new 13-year agreement to provide Land O'Lakes with certain services currently provided by Geosys to Land O'Lakes with total annual fees payable to UrtheCast in excess of US$10 million per year, and an increased rate at such time as the UrtheDaily Constellation is operational.
Under the Purchase Agreement, UrtheCast will pay US$5 million to Land O'Lakes for 100% of the ownership of Geosys on the first closing of the transaction, US$5 million within nine months of the first closing and US$10 million for the acquisition of the Geosys IP on the second closing of the transaction. The first closing is expected to occur in 2018 and the second closing is expected to occur within 27 months of the first closing. Land O'Lakes has also agreed to provide to UrtheCast certain services and a license to the Geosys IP from the first closing until the second closing under an interim services agreement.
Donald Osborne, CEO of UrtheCast, commented, "The geoanalytic capabilities of Geosys will significantly expand our reach throughout the growing agribusiness industry, and coupled with our long term partnership with Land O'Lakes, will position us to generate improved near-term earnings as we continue to advance the UrtheDaily Constellation."
UrtheCast intends to fund the acquisition of Geosys with a combination of available funds and debt for which it has obtained binding commitments. The first and second closings are subject to customary closing conditions and the transfer of certain intellectual property as part of a pre-closing internal reorganization. No regulatory or third party consents are expected to be required. The Purchase Agreement supersedes the binding letter of intent dated August 14, 2018 in its entirety.
UrtheCast Corp. is a Vancouver-based company that serves the rapidly growing and evolving geospatial and geo-analytics markets with a wide range of information-rich products and services. The Company currently owns and operates two Earth Observation (EO) satellites, Deimos-1 and Deimos-2. Together with its exclusive partnerships, spanning an additional 20 satellites, UrtheCast processes and distributes imagery data and value-added products on a global scale to partners and customers in multiple markets. UrtheCast is also launching UrtheDaily™, a satellite constellation that will be the most advanced change detection system in the world, designed to capture daily, scientific grade, high-quality, medium resolution optical imagery of the Earth's entire landmass (excluding Antarctica). UrtheCast is also developing OptiSAR™, a constellation of SAR satellites which, together with UrtheDaily™, will form the world's first fully-integrated optical and SAR constellation. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker "UR".
For more information, visit UrtheCast's website at www.urthecast.com.
Forward Looking Information
This release contains certain information which, as presented, constitutes "forward-looking information" or "forward-oriented financial information" within the meaning of applicable Canadian securities laws. Forward-looking information involves statements that relate to future events and often addresses expected future business and financial performance, containing words such as "anticipate", "plan", "explore" and "expect", statements that an action or event "may", "should" or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements relating to: UrtheCast's expected completion of the transaction on the terms set out in this press release, the Purchase Agreement or at all; UrtheCast's expectations with respect to its ability to pay the aggregate purchase price; and UrtheCast's expectations with respect to the revenue to be generated by the service agreement. Such statements reflect UrtheCast's current views with respect to future events. Such statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by UrtheCast as at the date of this press release, are inherently subject to significant uncertainties and contingencies. Many factors could cause UrtheCast's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others: UrtheCast's inability to enter into definitive ancillary documentation, including the service agreement, or satisfy any of the other conditions to the completion of the transaction; UrtheCast's inability to complete the first or second closing; UrtheCast's inability to fund the purchase price; UrtheCast's inability to generate the expected revenue from the service agreement; UrtheCast's inability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios or otherwise satisfy the first drawdown conditions or the final drawdown conditions under the credit agreement described in its May 23, 2018 press release in a timely manner or at all; as well as those factors and assumptions discussed in UrtheCast's annual information form dated April 2, 2018, which is available under UrtheCast's SEDAR profile at www.sedar.com. UrtheCast cautions readers that such factors and uncertainties are not exhaustive and that should certain risks or uncertainties materialize, or should underlying estimates or assumptions prove incorrect, actual results, performance or achievements may vary significantly from those expected. There can be no assurance that the actual strategies, results, performance, events or activities anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company.
UrtheCast undertakes no obligation to update forward-looking statements except as required by Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.
SOURCE UrtheCast Corp.