K-TIG Limited (ASX:KTG) entered into a binding agreement to acquire Graham Engineering Limited from the trustees of the Corry Thomas Graham, Peter Manley and Pauline Graham for £17.5 million on January 27, 2023. An upfront cash payment of £10 million payable on Completion, cash payment £4.55 million for the Freehold Property which is payable on Completion, a deferred cash payment of up to £3 million to be calculated based GEL?s EBITDA for FY2023, being the financial year ending August 31, 2023. Upon completion of the Acquisition, it is proposed that Mr Tony Eckford will join the board of directors.

In connection with the Acquisition, the K-TIG intends to raise £11.5 million at an issue price of £0.11 of fully paid ordinary share pursuant to a public offer under a full form prospectus (?Capital Raising?). Together, the Acquisition and Capital Raising are the ?Transaction". On completion of the Acquisition GEL will become a wholly owned subsidiary of the K-TIG, and the K-TIG main undertaking will be specialist manufacturing in the nuclear decommissioning industry.

Unless otherwise agreed, the Term Sheet shall terminate automatically on February 28, 2023 in the event a longer form share sale agreement has not been agreed. GEL is revenue generating with reported revenue of £13.5 million and adjusted EBITDA of £1.3 million for FY2022. The Company does not intend to seek a waiver from the 20 cent rule.

The K-TIG may require further confirmations from ASX prior to completion. The transaction is subject to Due Diligence, Material adverse change, ASX Approval, Shareholder Approval and Independent Valuation of Freehold Property. The Company does not intend to seek a waiver from the 20 cent rule.

The K-TIG may require further confirmations from ASX prior to completion. On March 21, 2023, K-TIG signs definitive share purchase agreement to acquire Graham Engineering Limited, a UK-based specialist manufacturer, of highly engineered, large scale metal fabrications to the UK nuclear decommissioning sector. K-TIG has completed due diligence on GEL to its satisfaction and intends to proceed with the acquisition.

Transaction is subject to certain conditions precedent. The Acquisition is subject to the following key terms and conditions: K-TIG will pay up to £17,550,000 in consideration for the Acquisition, consisting of: (i) an upfront cash payment of £10,000,000 payable on completion; (ii) cash payment for the GEL?s freehold property (£4,550,000) payable on completion; and (iii) a deferred cash payment of up to £3,000,000 to be calculated based GEL?s EBITDA for FY2023, being the financial year ending 31 August 2023 (Deferred Payment). The Acquisition is subject to a number of conditions being satisfied, including: (i) (ASX Approval) ASX providing a conditional admission letter to the Company on terms satisfactory to the Company (acting reasonably); (ii) (Shareholder Approval) The Company?s shareholders approving the Acquisition; (iii) (Funding) the Company obtaining funding for the Acquisition; and (iv) (Receipt of clearance under the National Security and Investment Act 2021 (the ?NSI Act?)) the Secretary of State notifying the Company pursuant to section 14(8)(b)(ii) of the NSI Act that no further action will be taken in relation to the Acquisition or, if a call in notice is given by the Secretary of State under s.1(1) of the NSI Act, the Secretary of State giving a final notification that no further action will be taken in relation to the Acquisition.

GEL and K-TIG have agreed to extend the period of exclusivity to 20 March 2023 to allow finalisation of the long form. share sale agreement. As on July 21, 2023 according to the deed of variation The Company will pay the Sellers and GEL Optionholders £13.55 million in cash consideration on Completion An upfront cash payment of £6.5 million payable on Completion of the Acquisition; £2.5 million in respect of the Acquisition, which will be subject to vendor finance; The Sellers agree to defer the receipt of payments otherwise due and payable from the Company, under the terms of a vendor financing facility agreement (Vendor Financing Facility) and treat each of the following as a drawdown under the Vendor Financing Facility: £4.55 million for GEL?s freehold property, which will be subject to vendor finance ; and £2.94 million for the net cash/debt adjustment to reflect GEL?s cash position and other agreed cash adjustments of which a proportion is subject to vendor finance and is currently expected to be £1.6 million.

K-TIG Limited has reached its sunset date of August 31, 2023 to acquire Graham Engineering, with a number of conditions precedent not yet satisfied. K-TIG remains committed to completing the SPA, and, subject to the intentions of GEL, is willing to negotiate good faith variations to the Share Purchase Agreement to allow this to occur. In the event that a variation cannot be agreed, either party may terminate the SPA.

The Company is currently exploring a number of funding options in order to complete the transaction, as such the Company wishes to advise that the supplementary prospectus dated July 21, 2023 will be withdrawn.