Acorn Computer Group plc Network Computing products - Distribution Agreement signed
Acorn announces that its subsidiary, Acorn Computers Limited, has today entered into a distribution agreement with NChannel International Limited ("NChannel"), a newly formed marketing, sales and distribution company. The agreement is intended to enable Acorn, without bearing significant financial risk, to exploit it's technology lead and to access under the Acorn brand name the potential global consumer market for Network Computing products. The distribution agreement covers all products developed or to be developed by Acorn pursuant to its agreement with Oracle Corporation ("Oracle") over a period of ten years from today's date, and is worldwide but non-exclusive in scope, with the exception of the US where it is exclusive until the end of 1997. In certain circumstances NChannel is entitled to a royalty holiday until the end of 1997.
Acorn has agreed to subscribe for approximately 44.5% of the ordinary share chapital of NChannel for nominal consideration, with a further 35.5% allotted on the same terms to a trust established for the benefit of NChannel employees. Titan Computers Limited ("Titan"), a company owned by a trust of which Acorn non-executive Director, Hermann Hauser, in a discretionary beneficiary, has agreed to subscribe for the balance of NChannel's initial ordinary share capital (comprising approximately 10 million ordinary shares) at 8p per share payable in cash. Discussions are under way with a number of partners with a view to obtaining the substantial further funding which will be required. In the event that this funding is not procured on terms acceptable to Acorn, the distribution agreement is terminable at Acorn's option.
NChannel's chairman is Hermann Hauser, and David Lee, Managing Director of Acorn, is a non-executive director. Potential executive directors with international experience of marketing consumer electronics products have been identified. It is intended that NChannel will market Network Computing products in the US and Continental Europe as well as in the UK.
