Investment in IRL associate boon for high-tech manufacturing

Media Release
31 March 2011

Investment in IRL associate boon for high-tech manufacturing

IRL Chief Executive Shaun Coffey says the sale of a controlling stake in IRL associate company HTS-110 to Dunedin-based Scott Technology will enable HTS-110 to rapidly expand its already significant presence in high-value, global markets.

Under the terms of the sale IRL and American Superconductor Corporation have diluted their shareholdings and Endeavour Capital has sold its stake as have several minority shareholders. This means Scott Technology has acquired a majority stake in HTS-110.
HTS-110 designs, manufactures and sells powerful electromagnets that utilise world-leading superconducting technology developed at IRL.
Applications for HTS-110’s products range from cutting-edge nanotechnology to the manufacture of ultra-high capacity computer hard drives, and from accelerated drug development to increasing yields in biofuel plants.
“HTS-110 has been growing rapidly over recent years to develop a leading position in the global superconducting magnet market. Its success and potential to grow further mean it is now an appropriate juncture for IRL to transfer this world leading technology to an ambitious New Zealand firm.

“In Scott Technology we have found a company that already has a global presence and is familiar with successfully developing and selling high-tech, high-value products in New Zealand and around the globe,” says Shaun Coffey.

Scott Technology Managing Director Chris Hopkins says the Board of Scott Technology is excited about the opportunities that the acquisition of HTS-110 will provide.

“Despite its early stage of development, Scott expects HTS-110 to be both earnings and cash-flow positive from the date of acquisition. Revenues and earnings are expected to grow significantly in the medium to long term as the product range moves through to full commercialisation.

“In the short to medium term HTS-110’s strategy is to grow its market footprint, target industrial users and create alliances to provide integrated solutions for selected industries,” he says.

Endeavour Capital Executive Chairman Neville Jordan says the acquisition is extremely beneficial to all parties.

“As a fund manager of one of the New Zealand Government’s Venture Investment Funds, Endeavour Capital is charged with seeding investment in innovative, fast growing New Zealand companies like HTS-110.

“Right from the outset we saw considerable potential in HTS-110 and having supported its growth from the outset it is very satisfying seeing HTS-110 move into a new phase of development under the guidance of one of New Zealand’s top technology companies,” he says.

Superconducting technology enables the transmission of electricity without resistance or the loss of energy. It can also be used to generate very strong magnetic fields and HTS-110’s magnets utilise this technology to produce powerful yet compact systems, such as Nuclear Magnetic Resonance and Magnetic Resonance Imaging machines that deliver speed and power to customers.

In the coming years superconducting technology will enable the manufacture of lighter, smaller and more efficient machines than can be achieved with existing copper wire technology. The global market for superconducting applications is thought to be worth several billion dollars in the coming decades.

Shaun Coffey says the share sale demonstrates how world-leading technology developed at IRL can support New Zealand companies and add value to the New Zealand economy.

“IRL has been a world leader in the development of superconducting technology for more than two decades. During this time we have maintained a strong capability across the full R&D spectrum – from fundamental research into superconductivity, all the way through to the development of new engineering techniques that enable the application of superconducting technology in an industrial context,” he says.

Shaun Coffey says IRL will continue its superconductivity R&D programme and will continue to supply R&D support to HTS-110 under its new ownership structure.

IRL scientists and engineers have received several prestigious awards for their work in superconductivity. These include inaugural winners of the Prime Minister’s Science Prize Drs Bob Buckley and Jeff Tallon, and the IRL team that developed superconducting technology cable from highly fragile superconducting wire, who won the Royal Society of New Zealand’s Cooper Medal.

ends

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