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March 29, 2005

Visual Defence aims to raise $37m

Visual Defence, a provider of digital security systems, has announced it is to float next month on the alternative investment market (AIM) of the London Stock Exchange, with an expected market valuation of GBP 70m ($131m).

By CBR Staff Writer

The company is yet another spin-off from Emblaze, the London-listed technology firm that has already produced media technology company Adamind (which raised $28m in February when it floated on AIM), and internet TV group Orca Interactive (which raised $25m on AIM last October).

Emblaze was formerly known as Geo Interactive, an Israel-based group of companies that offered communication technologies for various sectors including the military and homeland security markets. Visual Defence was created from the merger in January of a spin-off company of Emblaze (namely Emblaze Defence), and the security and surveillance companies of Girit Projects of Canada.

Visual Defence currently employs over 70 employees, and is headquartered in Toronto, Canada with R&D and sales and marketing operations in both Canada and Israel. Essentially, it produces audio-visual security systems that can be hooked up either to existing phone lines or run over wireless networks or broadband connections. Its technology allows customers to monitor offices, factories or public spaces using a variety of instruments including cameras, microphones, infra-red sensors and swipe-card doorways.

The company mainly specializes in integrating telecommunications and security systems for airports, factories, buses, trains and trucks. Existing customers includes Toronto and Zurich airports, as well as the US national guard and the oil giant Esso.

According to market researcher Datamonitor (the parent company of ComputerWire), the market for homeland security and surveillance is estimated to be worth $42bn, with the audio-visual component of security spending set to increase by more than 50% a year to $7.4bn by 2007.

Visual Defence is known to be keen to break into the UK market for airport security, and industry reports reveal it is currently participating in a large tender for the new Terminal 5 at Heathrow Airport. The tender is due to be closed this year, and is expected to total tens of millions of dollars over five years. The sources also claim that the company is participating in several IDF and US Department of Homeland Security tenders.

The float itself is scheduled for the end of April, and should raise about GBP 20m ($37.4m). The placing is being organized by KBC Peel Hunt, and Visual Defence has stated that it will use the funds to increase sales and marketing, and strengthen its balance sheet so as to win more contract tenders.

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The float is also expected to make a multi-millionaire of the company’s chief executive, Oved Tal, an Israeli-Canadian entrepreneur who founded Visual Defence and owns a fifth of the stock. Tal launched Girit Projects back in 2000 with cash borrowed from friends and family.

Emblaze owns just under half the group, and has no plans to sell its stake, leaving about a third in public hands.

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