Dec 9 2010
Fortress Paper Ltd. ("Fortress Paper" or the "Corporation") (TSX:FTP) announces the signing of an asset purchase agreement (the "APA"), by its wholly-owned subsidiary Fortress Optical Features Ltd., to acquire the assets of the Bank of Canada's Optical Security Material (OSM) division (the "OSM Assets"), which produces the optically variable security material for the security threads contained in Canadian banknotes.
The Corporation will be paying a purchase price of $750,000 for the OSM Assets and will be granting the Bank of Canada a royalty-free license to use the intellectual property sold to the Corporation for Canadian banknote applications.
Chad Wasilenkoff, CEO of Fortress Paper, commented, "We are very pleased to announce this new acquisition which will supplement our existing paper-based high security feature offerings and which we intend to market as a security feature to other banknote producers around the world. The OSM features will complement and enhance our Landqart Mill which is a leading producer of banknote paper and other paper-based high security solutions."
The OSM Assets being acquired by Fortress Paper include certain patent applications and intellectual property rights to optical security features, unique security applications and substantially all of the production equipment and machinery currently used at the OSM division. In connection with this acquisition, Fortress has also secured the services of certain key members of the OSM team to maintain operational continuity and production quality following the purchase of the OSM Assets.
The closing of the APA, which is expected to be in early January, 2011, is subject to customary conditions. Following closing of the acquisition of the OSM Assets, the Corporation intends to relocate the OSM Assets to a new multi-million dollar high security production and research and development facility which the Corporation will be building adjacent to its Thurso Mill in Quebec (the "New OSM Facility").