Torotrak strikes £8m licensing deal
TOROTRAK, the Lancashire vehicle transmission specialist, has agreed an £8m licensing deal with one of its biggest customers.
The Leyland-based firm said it had struck the deal with US-based Allison Transmission, which is also the largest shareholder with 9% of the shares.
The cash, paid in two instalments over two years, secures Allison’s rights to a non-exclusive licence in 2013 in the market for commercial vehicles weighing more than 14,000 kg.
These rights are currently held on an exclusive basis until 2013 by Torotrak’s other major customer, an unnamed major European truck and bus manufacturer.
Since signing an initial deal with Allison in March 2009, £9.6m of licensing and engineering fees have been paid to Torotrak. The latest arrangement will take the value of the partnership to £17.6m over a three-year period to April 2012.
In addition, Torotrak has agreed to provide engineering support to Allison. The company, which is listed on the FTSE techMark All Share index, said all parts of the business continue to operate in line with expectations. Results for the year to March 31 are expected on May 24.
