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Ammtec’s $29 million deal falls through

METALLURGICAL testing firm Ammtec Ltd has announced that it does not expect to sell its 68.5 per cent interest in a US company anytime soon after a $29 million deal to offload the interest fell through. The Balcatta-based company said the buyer of its 68.5 per cent interest in resin manufacturer Purity Systems Inc failed to settle the transaction by the October 30 deadline. Ammtec had announced in August it was offloading its stake, saying too much effort and capital was required to develop the resin technology, which would have impacted further on the company’s earnings per share. Ammtec paid $4.3 million for PSI when it took majority control last year and incurred $400,000 of PSI’s loss of almost $600,000. Ammtec said that while the unnamed buyer may choose to pursue the stake at a later date, it is under no obligation to sell the interest to that buyer. It added that it did not expect to sell the PSI shares in the near-term. As a result of the deal falling through, Ammtec has reverted its fiscal 2009 projections to the original guidance provided in August. It anticipates a net profit of $10 million, down from $12.2 million, with revenue at $55.6 million and earnings per share at 40 cents. Ammtec said it remains committed to the development of the PSI business and has continued to progress marketing of the PSI resins while the sale process was ongoing.

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