27 October 2005
Farr Canada acquires manufacturing rights
ESTec Systems Corp. (ESE: TSX Venture Exchange)
is pleased to announce the signing of a Technology Licensing Agreement
between Farr Canada ("Farr Canada"), a division of McCoy
Corporation (MCB: TSX) and Allan R. Nelson Engineering (1997) Inc.
("Nelson"). The Agreement provides for royalty payments
to Nelson in relation to the licensing for the manufacture and sale
of the top drives based upon designs prepared by Nelson.
This Agreement with McCoy Corporation replaces the previous Agreement
that provided a license from Nelson, a subsidiary of ESTec Systems
Corp. to TD Equipment Inc. in September, 2004. Both parties have
agreed to retract their Agreement in favour of the Farr Canada arrangement.
In the spring of 2005 an opportunity was identified by TD Equipment
Inc. to license the technology to Farr Canada, which is a substantially
larger organization with a worldwide network for sales and support,
with the capability to produce substantial revenue for the technology.
An agreement was negotiated with TD Equipment Inc. to rescind the
license allowing it to be issued to Farr Canada. It is expected
that this license could generate substantial royalties over the
next five years. This will allow Nelson to recover the cost of developing
the technology and contribute to the profitability of the company.
Mr. Anthony Nelson, President states, "Farr Canada has financial
resources, a manufacturing facility and a world wide distribution
network. Over the term of the agreement Farr Canada is likely to
sell several times as many top drives as TD Equipment would be able
to sell given its financial and distribution limitations. We are
excited over the potential revenue stream that this Licensing Agreement
can provide to ESTec and its shareholders."
Farr Canada manufactures hydraulic power tongs and related equipment
used in oil and gas well workover and drilling applications on both
on-shore and off-shore rigs. McCoy Corporation ("McCoy")
is listed on the Toronto Stock Exchange under the symbol "MCB".
McCoy has three operating segments: Truck & Trailer Products
& Services, Trailer Manufacturing and Oilfield Products Manufacturing.
McCoy and its subsidiaries employ approximately 540 individuals
in Alberta and British Columbia.
ESTec Systems Corp. is an Edmonton-based public
company with two operating divisions: Allan R. Nelson Engineering
(1997) Inc. and ESTec Security. Allan R. Nelson Engineering is a
group of professional engineers and technologists who carry diverse
skills and a variety of professional backgrounds. They are Canada's
leading forensic engineering firm, serving domestic and foreign
markets, in particular in the petrochemical, mining and drilling
equipment industries, and also provide mechanical design engineering
for their clients. ESTec Security is a cutting edge information
security development and service company. It offers BS7790 / ISO
17799 / ISO 27001 implementation consulting and auditing services.
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