Ztest to Acquire 53.26 percent of Chessen U.V. Systems Inc. in share for Share Exchange Offer Valued at $1,734,569
MISSISSAUGA, ONTARIO--ZTEST Electronics Inc., ZTST-CDN, ("ZTEST") is pleased to announce that it has made an offer to acquire at least 51 percent of the issued and outstanding common shares of Chessen U.V. Systems Inc. ("Chessen") located in Mississauga, Ontario on the basis of one (1) unit of ZTEST to be issued for each six (6) issued and outstanding common shares of Chessen tendered to the take-over bid. Each unit is comprised of one (1) common share of ZTEST and three-tenths of a common share purchase warrant. Each full warrant will entitle the holder thereof to purchase one (1) further ZTEST common share at $1.75 for two (2) years following the closing of the transaction.
Shareholders holding an aggregate of 53.26 percent of the common shares of Chessen have agreed to tender their shares to the take-over bid. ZTEST will issue a minimum of 1,020,835 units for the transaction. The transaction is subject to due diligence review of Chessen by ZTEST to be completed within thirty (30) days. The common shares of ZTEST to be issued as part of the units will be subject to a voluntary pooling agreement which specifies that eighty (80 percent) percent of the shares to be issued will be restricted from resale by the shareholders of Chessen tendering to the take-over bid subject to release at the rate of one-quarter (1/4) on each of six (6) months, nine (9) months, twelve (12) months and fifteen (15) months following the closing of the transaction.
Chessen is a private Ontario company formed in 1992. Chessen, involved in the field of Advanced Surface Engineering Technologies, has completed five (5) years of Research and Development utilizing an international group of sixteen (16) scientists who were brought together by the President of Chessen, Mr. Darek Molenda.
Commercialization of Chessen's Research and Development efforts has recently begun, resulting in the marketing of its advanced thin film systems and custom coating services throughout the world. The potential applications for these product offerings includes most industries, with the most dominant being the electrical, optical, military, nuclear, automotive and aerospace industries.
The commercialized products fall into two (2) major product groups: (1) thin film Physical Vapour Deposition (PVD) technologies, and (2) Laser and U.V. radiation technologies.
The PVD technology, is an ultra high vacuum physical vapour deposition process in which atoms or molecules from a vaporization source reach the substrate without colliding with the residual gas molecules. This PVD process produces a wide range of wear resistant, anti-corrosive, thin hard films. Chessen has also developed new multi-laying technology with synergistic properties producing many added applications. The Chessen PVD processes are energy conserving and environmentally friendly, creating a significant competitive advantage over the older, more traditional methods of coating and plating, which use highly toxic chemical compounds.
Chessen sells their fully automated systems starting at US$ 400,000, plus license fees for each specific thin film ordered by the customer.
The Laser and U.V. radiation technologies would be best described as being radiation curable organic coatings and surface modifications of polymers with electromagnetic radiation. The initial focus, from a commercialization point of view, is the introduction of a line of processors to increase production speeds and reduce rejection rates for specialized rubber products and painting materials in the automotive industry. The initial prototype was put into a manufacturer's test production line six (6) months ago, and Chessen has entered into negotiations for delivery of additional systems.
Chessen has an order backlog of $2,500,000 for their PVD Systems, scheduled for delivery over the next ninety (90) days, and is demonstrating their new technology at the world's largest Manufacturing Technologies Show (EMO) in Hanover, Germany later this month.
This new Strategic Partnership with Chessen is the third for ZTEST. The other two (2) Strategic Partnerships are with UNIQIRYPT Technologies Inc. of Mississauga, Ontario and Nexsys Commtech International Inc. of Waterloo, Ontario.
ZTEST, in addition to its proprietary line of Automatic Test Equipment, offers Strategic Partner services in electronic design, development and manufacturing to emerging high tech companies in return for long-term manufacturing contracts, fees for services and equity positions.