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Converting research into business

11 November 2009

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Translating world-leading University research into business is set to benefit from a major new agreement designed to provide access to new knowledge, finance and business expertise.

In 2007, Fusion IP, the university IP commercialisation company that turns world class research into business, signed a 10-year year agreement with the University for the exclusive right to commercialise all of the University-owned intellectual property, through the creation of spin-out companies.

Under a new Co-investment Agreement announced this week, Fusion IP and IP Group PLC, one of the UK’s companies which works to commercialise intellectual property originating from research intensive institutions, will combine their knowledge and resources to help evaluate and assist new portfolio companies.

IP Group will have the right to acquire for cash, at a valuation of £500,000 or 20 percent of Fusion’s shareholding in any new Fusion Portfolio company, which will normally equate to 12 percent of the new spin-out company.

In return, IP Group will also make available its in-house portfolio support services, including areas of senior management, recruitment and capital markets.

Also announced this week, Fusion IP has conditionally agreed to raise £3.2M which will be used to further enhance the value of the University’s world-class research. Fusion IP will continue to invest in further spin-out companies and bring its current portfolio companies to fruition with the funds that have been raised. Following the fundraising, IP Group will hold 19.8 percent of Fusion IP.

David Baynes, Chief Executive Officer of Fusion IP, said: "We are delighted to be working with IP Group and welcome them, both as a new shareholder in Fusion and a co-investment partner. Their investment, combined with the strength of our IP pipelines, will enable us to continue to create long term value from Cardiff’s world class research.

"Fusion currently has a strong portfolio of 20 active spin-out investments. We are expecting to spin-out up to three new companies during the period ending July 2010 and anticipate spinning out further companies in 2011 and 2012. The funds raised today, combined with our existing strong relationship with Finance Wales, will allow us to continue this momentum to spin out further high quality portfolio companies.

"IP Group’s investment in Fusion is a strong endorsement of Fusion’s investment proposition and ability to identify and commercialise IP. Together, Fusion and IP Group will make a powerful combination of knowledge and resources and we look forward to working with Alan and his team."

Alan Aubrey, Chief Executive Officer of IP Group PLC, said: "We are very pleased to have agreed this proposed strategic investment in Fusion. We have a high regard for the Fusion management team and the portfolio which they have established from the exclusive framework agreements which Fusion has with Cardiff, one of the leading research universities in the UK. We look forward to working together with the Fusion team."

Since 2007, when Fusion signed its agreement with the University, Fusion IP has created and supported a number of key University companies, including Mesuro Ltd.

The company, a spin-out from the School of Engineering, is an early stage company which develops new approaches for the mobile communications industry. Mesuro's technology has been developed as a result of over a decade’s research at the University's Research @ School of Engineering" target="_blank" href="http://www.engin.cf.ac.uk/research/resInstitute.asp?InstNo=7">High Frequency and Communications Engineering Research Group at the School of Engineering.

With the support of Fusion IP, the company has launched a number of new and innovative testing and measurement devices which seek to overcome the limitations of traditional high frequency design and testing.

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