I stand to be corrected but it is my understanding that along with the sale of 100% of GFI would go its existing contracts for fuel marking. No where have I seen it mentioned that EUO would transfer those contracts to some other division and they listed the revenue from those contracts as income from DISCONTINUED operations so that kind of sums it up.
They discuss the terms of the contract in last MD&A but I have not seen the entire contract published anywhere so that is where the possibility of correction comes in. This is from that discussion...
SALE TRANSACTION
On November 6, 2015, the Company entered into the definitive agreement (the “Purchase Agreement”),
pursuant to which the Company has agreed to sell 100% of its wholly-owned subsidiary GFI to SICPA in
exchange for cash and post-closing earn-out and additional payments. As a key part of the Purchase
Agreement, the Company, through its wholly-owned subsidiary, Xenemetrix has agreed to enter into a
strategic exclusive long-term supply, maintenance and support agreement, pursuant to which Xenemetrix
would continue to supply to GFI, and GFI would continue to purchase, Xenemetrix’s products and
services currently used by GFI in its business, in each case, on an exclusive basis within the oil and gas
marking and monitoring field of GFI’s current operations.
EUO did pick up this little bonus in the deal which alone could make up for the three contracts they let go..
Historically, Eurocontrol has been limited to revenue from the sale of fuel markers and
analyzers/detectors. This agreement expands Eurocontrol’s exposure to the fuel marking market
significantly through the inclusion of operational logistics in the earn-out payment stream. Logistics
revenue as a component of the over-all revenue derived from a comprehensive fuel marking program are
generally a multiple of the revenue generated from sales of markers and detectors.
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