Perth, June 4, 2008 AEST (ABN Newswire) - Stirling Products (ASX:STI) advises shareholders that it has signed a term sheet with Aquience, a Canadian company, for the exclusive rights to its companion animal product PetQuench(tm), which is already being sold and distributed in North America.
PetQuench(tm) is a patented, fortified water formulation especially designed for dogs and cats to help increase the daily consumption of water. It is currently available in over 100 stores across Canada and shortly to be introduced into the United States.
Under the terms of the Agreement to be formalised over the next thirty days, Stirling will acquire all of the profits from the current North American sales as well as the exclusive worldwide license rights to the product. Sales in North America alone are budgeted to be in excess of US$25 million over the next five years.
"The terms of the Agreement which remain confidential at this stage complement Stirling's overall strategy of early stage revenue generation that require low upfront costs with the majority of payments based on progressive sales," commented Dr Calvin London, CEO & Managing Director of Stirling Products.
A recent report by Euromonitor International projected that the current growth of 15% in the pet food global market will continue and will be worth US$52 billion by 2012. While growth in Western Europe and North America will continue to be strong, regions such as Asia Pacific will outpace them achieving a 21% increase to become a $5.3 billion market by 2012.
"Since the growth for companion animals continues to be the most impressive of any veterinary area, the Stirling team has a strong desire to be a part of this market segment," indicated Dr London. "Strategically, Stirling has been looking for some market-ready opportunities in companion animals as a forerunner to products under development from its own technology platforms; the main one being R-salbutamol for treating obesity in dogs. This has all the characteristics; already generating sales, the option of a 'pay-as-you-go approach' and low regulatory hurdles for new market entries such as Australia, New Zealand, South East Asia and even Japan," indicated Dr London.
Veterinarians have been urging pet owners to get their dogs and cats to drink more water in order to avoid kidney complications as an increasing percentage of diets are now high protein dry food. Urinary tract and kidney infections are among the most diagnosed disorders of both dogs and cats particularly as pets are now living longer.
"PetQuench(tm) has been scientifically designed and veterinary approved to help with these conditions and as a result of the specially formulated ingredients, significantly increases the water intake as well as aiding in the improvement of general gut and urinary tract health. This product does not compete with solid pet food, it complements these pet foods," indicated the President of Aquience Inc., Mr Derrick Walker. "We are pleased our relationship with Stirling has developed to this stage as we have always planned to find an international partner to progress this product to markets outside of North America. We can already see other opportunities for further collaboration so it seems like a very good fit."
This represents the second deal that Stirling has effected with a Prince Edward Island company, following the acquisition of Progressive BioActives Inc. in August last year.
Finalization of the Agreement will be discussed with market as it progresses.
Contact
Dr London
TEL: +61-8-9480-1480
MOB: +61-400-204616
Company website www.stirlingproducts.net
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