Baylon to reverse into female security devices manufacturer Ila Security

Baylon Holdings (AIM: MOLE), formerly the Molectra Group, has agreed the terms for its acquisition of privately owned Ila Security, the developer and manufacturer of personal security devices for women. The transaction will see Baylon issue up to 763.3m shares to Ila shareholders, representing approximately 82.4% of the enlarged share capital. The enlarged company will be re-named the Ila Group.

The share-based acquisition consists of 388.6m initial consideration shares, and up to 374.7m contingent consideration shares, which will be determined by the outcome of Molectra Australia’s application for tax credits worth £554,444. Should the Australian tax credit be received in full by 31st December 2010 no contingent shares will be issued to Ila shareholders, however should the company receive less than £554,444 then either some or all of the contingent shares will be issued.

"Baylon are delighted to be acquiring Ila at this time of its growth. Ila has created a brand with huge potential with limited capital”, Baylon CEO Paul Gazzard commented. “We hope the additional resources this deal provides will allow Ila to fulfil its potential and grow into an international brand".

Ila's first product was the Dusk, a pocket-sized alarm that emits a 120 decibel female scream. The company’s pipeline also includes five new products which are considered to be at a relatively advanced stage of development. The deal is expected to help fund the continued development of the product portfolio, enhance its distribution prospects and accelerate future research and development programmes.

The new products, provisionally named Jogger, Hook, Wedge, Pebble and Leash, have received indications of early interest from existing retailers and offer potential new distribution opportunities as an extended product range facilitates their deployment to prospective new distributors. "The acquisition is ideally timed to allow the expansion of Ila's existing relationships with major UK retailers as well as our international sales programme within the US, Canada and Europe”, Ila Security Chief Executive Simon McGivern said.

On completion, Ila co-founder McGivern will become the enlarged group’s Chief Executive and whilst fellow co-founder James Phillips will become the Sales Director. Baylon’s current Chief Executive, Paul Gazzard will become Chief Operating Officer, while fellow Baylon directors Neil Munn and Adam Arnold will become non-executive directors of the enlarged group. Baylon’s current Chief Financial Officer, Rodger Sargent will stand down from the Board but will remain with the company as Financial Controller.

The deal is expected to complete on the 5th March, subject to respective shareholders approval. The first tranche of shares are expected to be admitted to AIM on the 5th March, with the contingent shares to be admitted at a later date, if necessary.  http://www.proactiveinvestors.co.uk/companies/news/13320/baylon-to-reverse-into-female-security-devices-manufacturer-ila-security--13320.html