GHF Greenhouse

RNS Number:3891F
Greenhouse Fund Limited (The)
29 June 2006



For immediate release                                              29 June 2006



                          The Greenhouse Fund Limited

                        ("Greenhouse" or "the Company")

                              Licence Acquisitions



 THE GREENHOUSE FUND ACQUISITION OF BAUXSOL SUB-LICENSES AND OTHER TECHNOLOGIES
                           FROM VIROTEC INTERNATIONAL


Greenhouse today announces the acquisition of five Bauxsol technology
sub-licences and the purchase of the assets of Sterling Environmental Solutions
(together the "Transaction") from Virotec International Ltd ("Virotec"). It is
intended that Brian Sheeran, Virotec Executive Chairman, be appointed to the
board of Greenhouse to oversee commercialisation of these technologies.


The aggregate consideration for the above transactions is #5 million, to be
satisfied by the issue of 30,000,000 new shares in Greenhouse ("Shares") and a
further #500,000 in cash. At the opening price on 29 June 2006 of 15p, the Share
element is valued at #4,500,000. As a result of the issue of the Shares, Virotec
will have a 19 per cent. holding in the voting share capital of Greenhouse. An
application has today been made for the Shares to be admitted to trading on AIM
and it is expected that the Shares will be admitted to trading on 5 July 2006.


Background to the Transaction


The five technologies being sub-licenced to Greenhouse are Bauxsol platform
technologies developed by Virotec. These are:


(a) ViroConcrete Technology, speciality cement products with applications in
shotcreteing, grouting, high density concrete, acid exposed concrete or
concretes that are exposed to water or wet environments, particularly salt water
environments;

(b) ViroAirFilter Technology, designed to remove mercury, CO2 and other
polluting metals from industrial flue gasses by 'gas scrubbing' such
environmentally hazardous compounds from waste gases prior to their release into
the atmosphere;

(c) ViroFertiliser Technology, aims to control the level of phosphate pollution
and increase crop yields via the slow release of phosphate from superphosphate
fertilisers;

(d) Gastric animal applications; aims to relieve chronic and potentially life
threatening gastric problems within animals; and

(e) Any further new commercial applications developed from the Bauxsol
technology; giving Greenhouse access to the time and efforts of the two main
scientists, their facilities and staff involved in the development of Bauxsol
and its applications in the Southern Cross University in New South Wales,
Australia.


The intellectual property rights of the above technologies are either held
directly by the Virotec Group or licensed to it by Nauveau Technology
Investments Limited, a company outside the Virotec Group and is ultimately owned
by either Nauveau Technology Investments Ltd or another entity, Mount Aspiring
Geochemistry Limited, a company outside the Virotec Group.


Greenhouse has established a wholly-owned subsidiary company, Greenhouse IP
Development Limited, to hold the sub-licences and to develop the related
technologies.


The strategy is to further develop the technologies, using both academic and
commercial partners from within industry. Once an application has been fully
commercialised, Greenhouse will consider the strategic options available to
maximise shareholder value. Such alternatives include introducing a new
structure for each license, depending on the particular market and opportunity
that it faces.


In addition, as part of the Transaction, Greenhouse has, through another wholly
owned subsidiary (Greenhouse Organic Solutions Limited), purchased the assets of
Sterling Environmental Solutions Ltd ("Sterling"), a UK non-trading company with
a view to establishing a regional treatment centre ("RTC") for the treatment of
high strength organic waste streams. The assets acquired include all
intellectual property rights owned or used by Sterling, including all rights
relating to the concept for the treatment of industrial waste at a central
treatment centre or RTC. Sterling has no trading revenue and has not filed any
audited accounts.


In addition, it is intended that Greenhouse will enter into a 12 month option to
acquire the business and assets of ImperativePlus Pty Ltd, a wholly owned
subsidiary of Virotec. It has been agreed in principle that Greenhouse will pay
a nominal consideration on grant and on exercise of this option.


Greenhouse Chairman Nigel Wray commented, "This is a very exciting transaction
for Greenhouse, coming less than six months since its launch on AIM. We believe
that Bauxsol is a tremendous technology and provides a platform for a range of
applications; each of the applications we have licenced has the potential to
become a significant business in its own right. Greenhouse will also work with
Virotec and our research team to create further new Bauxsol applications. I look
forward to announcing developments as Greenhouse works on the applications and
partners with academic and industry research bodies to further the commercial
development of these technologies."


For further information please contact:


Paul Gazzard,
Greenhouse Advisor Ltd.
Tel: 020 7355 7600
Email: pg@greenhousefund.co.uk

Charles Ryland/Ben Willey
Buchanan Communications
Tel: 020 7466 5000

Further details of the Transaction


Virotec's patented platform Bauxsol Technology has been designed to extract
heavy metals, arsenic, phosphates and cyanide from water, soil and air through
its bespoke re-agents, without creating any hazardous waste streams. Once
treated, wastes are rendered inert or non-hazardous, and significantly easier
and cheaper to either be disposed of or reused. Bauxsol re-agents neutralise
acidity, bind and immobilise base metals and other elements via various chemical
reactions upon coming into contact with them. Whilst Greenhouse will not acquire
a licence to use the core Bauxsol Technology, it will be granted five
sub-licences to develop other areas of application and Virotec has agreed to
supply Greenhouse with Bauxsol materials.


Due to Virotec's commercial concentration on the roll out of other applications
of the Bauxsol Technology, Greenhouse has been able to enter into the five
sub-licenses. Virotec's consideration for the deal is primarily in Greenhouse
equity, giving Virotec a direct interest in supporting Greenhouse in the
long-term in its development of the various applications.


Virotec has agreed not to sell or otherwise dispose of the Shares issued to it
as consideration for the Transaction for a period expiring on the first
anniversary of Greenhouse's accounts being published, which is expected to be
March 2008, without the consent of Greenhouse and Evolution Securities Limited
save in certain limited circumstances.


The sub-licences also provide that Greenhouse will pay Virotec an ongoing
royalty on any revenue earned from the technologies. In addition, if any of the
technologies are subsequently sold by Greenhouse, any sale will include the
obligation to continue to pay royalties to Virotec and for Virotec to retain a
19 per cent. interest in the technologies for zero consideration.


Detailed below are the five specific applications being:


Sub-Licence 1: ViroConcrete Technology


This Bauxsol application has a potential commercial market in the speciality
concretes area. Following initial research by CSIRO (Commonwealth Scientific and
Research organisation, Australia) and Virotec that enabled a patent application
to be filed, research has continued at Queens University, Belfast under
Professor Bashir. This is a leading department for cement and aggregates
research in Europe and has won awards and achieved pier recognition for this
work.


Potential applications for ViroConcrete products include shotcreteing, grouting,
high density concrete, acid exposed concrete or concretes that are exposed to
water or wet environments, particularly salt water environments.


Greenhouse will continue to develop this technology with a view to full
commercial realisation. Following further proposed research and collaboration
with Queens University, Greenhouse will increase commercial and sales support as
the concrete market gains awareness of the products and their potential. The
long term aim is for ViroConcrete products to be recognised as the default
product for particular concrete applications and therefore become an industry
standard.


Sub-licence 2: ViroAirFilter Technology


This Bauxsol application, which has progressed in collaboration with the US
Environmental Protection Agency, has been primarily focussed on the removal of
mercury and Co2 from industrial flu gases. With these 'gas scrubbing'
applications ViroAirFilter Technology can remove environmentally hazardous
pollutants from waste gases prior to their release into the atmosphere.


The results to date indicate that there is significant removal of both mercury
and Co2 from industrial exhaust gases when they are allowed to pass through a
bed of a specific ViroAirFilter product. There is potentially a large commercial
market for these products. The next stage is to undertake a more wide reaching
study, in conjunction with a specialist academic body.


Sub-licence 3: ViroFertiliser Technology


This Bauxsol application aids phosphate pollution control and has the potential
to increase crop yields. Currently, large amounts of phosphate fertiliser are
applied to farm-land, with significant proportions washed from the soil by rain,
meaning poor utilisation of the fertiliser and contamination of local water. A
ViroFertiliser re-agent is added to the fertiliser material once mixed with the
phosphate fertiliser. It binds with the phosphate, keeping it in situ, thus
decreasing the fertiliser run off, water pollution and provides the user with
the opportunity to achieve greater value from the fertiliser.


Tests have shown there was a significant improvement in crop yields when the
ViroFertiliser Technology was used with fertiliser on, amongst others, cotton
crops in Australia. The next stage in the development is a combined study,
carried out by an internationally recognised research organisation to show the
combined effect of the product in its target application. A well known European
agricultural college is interested in carrying out this study. The results will
be used to raise the profile of ViroFertiliser within the industry. Greenhouse
will then approach chemical companies to bring the product through to the point
of commercialisation and roll out.


Sub-licence 4: Animal Gastric Applications


This Bauxsol application alleviates gastric ailments within animals. A patent
application has been filed for the application of the material in these areas.
Demonstration and proving work indicating the potential for a product has
already been carried out on horses. This represents a very interesting
application of the material for the large commercial market of animal gastric
problems. Greenhouse will select an academic institution to do further tests on
other species before introducing the product to commercial end users.


Sub-licence 5: Further Bauxsol applications


This licence gives Greenhouse the right to continue the development of further
applications of the Bauxsol Technology that are not currently subject to
commercialisation activities by Virotec into other target markets. In addition,
Greenhouse will have access to the time and efforts of the R&D scientists, their
facilities and staff involved with the development of Bauxsol and its
applications in the Southern Cross University in New South Wales, Australia.


Sterling


The assets of Sterling, which is a dormant non-trading company are being
acquired pursuant to a potential opportunity to develop an existing dormant
biological treatment plant in the North of England (which does not form part of
Sterling's assets) with a technology retro-fitted to the site and to operate the
site as a third party treatment centre for high strength organic wastes. The
IPPC permit required from the UK Environment Agency to operate the site has been
agreed to but not issued and this is likely to take approximately 4 months,
which is considerably quicker than normal.


Greenhouse is in negotiations to acquire the license for the retro-fitted
technology. The existing IP licensor for the technology is in favour of its use
and licensing it for the site. Greenhouse has considerable first hand knowledge
of the RTC market and believes collaboration with a landfill operator partner
would further enhance the credibility of the project and it is Greenhouse's
intention to seek such a partner following the acquisition of the IP license.


Directors' and other Interests


Nigel Wray, through PIHL Equity LLP, is deemed to be interested in 7.3 per cent
of the issued share capital of Virotec and 13.97 per cent of the issued share
capital of Greenhouse. In accordance with the Articles of Association of
Greenhouse, whilst he endorses the Transaction, he has not voted on the board
resolution to approve the Transaction.


It is intended that Brian Sheeran, will join the board of Greenhouse. Brian
Sheeran, is a director of, and beneficially interested in, 2.9 per cent. of the
share capital of Virotec. Virotec has a 33.64 per cent holding in Hydrodec Group
plc ("Hydrodec") and Brian Sheeran is also on the board of Hydrodec, together
with fellow Virotec director, Bruno Bamonte.


Rodger Sargent, who is a director and shareholder of Greenhouse Advisor Limited,
the Strategic Adviser to Greenhouse's Investment Adviser, is the finance
director of, and also a shareholder in, Hydrodec.



Valuation of the Transaction


The five Bauxsol technologies being sub-licensed and Sterling are at relatively
early stages of development and all require investment to bring to full
commercial realisation. This makes them subjective to value, as they are novel
applications of a relatively new technology. However, given the size of the
target markets for each of the technologies, the Directors of Greenhouse believe
they have significant commercial potential.


Given this, Greenhouse has valued each of the Bauxsol sub-licenses at #1,000,000
each, to reflect their potential and the requirement for additional cash and
management investment. The business and assets of Sterling are not considered to
carry a quantifiable valuation at this stage, so have been valued at a nominal
#1. This provides a valuation of #5,000,000. The valuation also takes into
account the 19 per cent. equity interest and royalties which Virotec will
receive in any vehicle that any sub-licensed technology is subsequently sold to.


Rationale for the Transaction


Greenhouse considers this to be a very good opportunity for the Company to
acquire licensed technology of potentially significant commercial value. This
licensed intellectual property should allow Greenhouse to populate its deal
pipeline with a platform technology that has the potential to provide many
applications in the future. The Bauxsol platform technology has already achieved
commercial and regulatory recognition and has already had significant
development capital invested in it by Virotec. Greenhouse will benefit from this
proving work and has the opportunity to further develop the technology into new
and as yet commercially untapped areas.


Greenhouse considers that the applications; including speciality concrete
products, fertiliser applications, gas scrubbing and stomach acid treatment in
animals have all had sufficient work done to demonstrate the potential for each
one to become, in time, the platform for a substantive business.


The deal structure should ensure that the interests of Greenhouse and Virotec
are aligned in working towards the common goal of successfully commercialising
the intellectual property and business being acquired by Greenhouse. The
Sterling platform has the potential to offer an alternative to landfill in the
disposal of high strength organic wastes and be rolled out across the UK and
Europe.


For Greenhouse, the Transaction has significant potential and brings with it
support from an established high profile operator in the sustainability sector
as well as the ability to generate its own intellectual property from a platform
technology in the future.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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