Touchstone Gold Limited Acquisition (0792W)

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RNS Number : 0792W

Touchstone Gold Limited

04 November 2014

Touchstone Gold Limited (AIM:TGL)

("Touchstone" or the "Company")

Acquisition of GOS Systems

London, 4 November 2014 - Further to the announcement of 3 November 2014, Touchstone announces that it has successfully concluded an investment in accordance with its investment policy.

Through a wholly owned special purpose vehicle, Touchstone has acquired the assets, intellectual property rights and businesses that constitute GOS Systems (website: http://www.gos-systems.com/), a UK security group providing a range of leading-edge tactical intelligence gathering and secure communication solutions for law enforcement, homeland security and government agencies around the world. GOS Systems was recently placed in administration and the acquisition by Touchstone was from the joint administrators (see below).

As part of the transaction, the on-going support of key operational and administrative personnel has been secured to ensure the continuity and consistency in the management and administration of the business. Touchstone's investment in GOS Systems means that essential services provided to a variety of agencies will continue unaffected, and also that existing suppliers and employees and other stakeholders will be secured.

Background

The acquisition of GOS Systems is in line with the Group's stated investing policy, and Touchstone will seek to assist GOS Systems to complement its organic growth with accretive acquisitions building on the strong foothold GOS Systems has in homeland security. GOS Systems' services include threat identification, sophisticated intelligence gathering, identity protection and increased security through its voice and data communication systems. GOS Systems currently has customers in the UK, Europe, Middle East and South East Asia and operations in the UK and Singapore.

Inclusive of a nominal consideration for the assets and goodwill, Touchstone has committed a maximum of GBP250,000 to finance the acquisition and to enable GOS Systems to fund initial working capital requirements. Additionally, Touchstone will make available up to a further GBP250,000 to fund growth development requirements. Touchstone is acquiring the GOS Systems business from WA Batty and SJ Evans of Antony Batty & Company LLP as Joint Administrators of GOS Systems Limited, Aappro Limited, and TG Support Limited. The acquisition consideration and future funding will be met from Touchstone's existing cash resources including the proceeds of the placement announced on 31 October 2014. The acquisition of GOS Systems, assuming a total commitment of GBP500,000 constitutes a Substantial Transaction as defined by the AIM rules.

Management Comment

Chief Operating Officer, Franz Forrester, commented: "We are pleased to have invested in to such a high quality business with a clear direction for future growth. GOS Systems has a top tier management team with significant experience in the telecommunications, defence and security sectors. We look forward to helping nurture the growth of GOS Systems into one of Europe's leading top-tier solutions providers to the homeland security market through organic growth as well as through selective acquisitions. One of the attractions of the investment in GOS Systems by Touchstone is the opportunity for Touchstone as a publicly traded company to assist GOS Systems be more effective in accretive acquisitions."

"We continue to review a number of other acquisition opportunities as we seek to fulfil the company's investing strategy and build on the unique platform created by GOS Systems. In addition we will continue to evaluate further opportunities and take advantage of the expertise now possessed by the company with the recent addition of Professor Gibson to the board and with a particular emphasis on the way in which new technologies will have an impact on areas such as encryption and secure communications."

Professor Arthur Gibson, Director of Touchstone, added, "Communications security and surveillance is a complex area where service delivery needs to be aligned with the most advanced technology. I am particularly focused on the related areas of cryptography, and GOS Systems provides Touchstone with the ability to build a dialogue with agencies for whom new technologies, as they emerge, will need to be adopted in order to maintain effectiveness."

For further information please contact:

 
 Touchstone Gold Limited        Tel: [phone] 
  Trevor Wells 
 
 finnCap Ltd                    Tel: [phone] 
  Matthew Robinson / Simon 
  Hicks 
 Peterhouse Corporate Finance   Tel: [phone] 
  Limited 
 Lucy Williams 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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