FireAngel signs ‘transformational’ deal with German partner
FireAngel, the Coventry developer of home safety products, has signed a deal with a German firm to embark on a research and development programme for a new generation smoke alarm.
The unnamed partner, which was founded nearly 70 years ago, provides services to approximately 12 million apartments worldwide and in its most recent financial period, being the six months ended 30 September 2020, had turnover of approximately €317m.
FireAngel has agreed to provide the partner with a new 10-year connected smoke alarm based upon FireAngel’s Gen6 platform. This next generation alarm will offer additional, innovative safety and environmental features to meet the increased demands of landlords as well as tenants. Both parties will have the right to use any foreground IP resulting from development of the new smoke alarm.
The German firm will fund the development phase of the next generation smoke alarm. In addition, FireAngel will receive a fee of £1.4 million for use of its background IP during the development phase. Once production of the next generation smoke alarm has started, a royalty fee per product will be payable to FireAngel with a multi-million volume fee agreed for the initial 30 months. Manufacturing of the next generation smoke alarm is expected to start in early 2024. The company says that 7 million new devices will be produced with a minimum of 3.5 million expected to be produced in the first 2.5 years.
FireAngel will be responsible for production of the new smoke alarm and that a manufacturing partner will be selected jointly during the development phase. It is expected that FireAngel will receive a minimum three-year manufacturing commitment and will receive a manufacturing and support fee payable for each device delivered.
John Conoley, executive chairman of FireAngel, said: “This is the most significant development for FireAngel for several years and is expected to be transformational for the group.
“The directors estimate that, during the life of the partnership, the company should earn up to €21 million in royalty, management and support fees. The company’s long-standing commitment to R&D, combined with the adoption of development processes from the IT world, have contributed to us signing this partnership which will be materially cash positive and contribute financially to the company for the long term.
“Finally, it reflects our aim to spend more of our time and resource on higher value activities. The customer has acted like a true partner throughout this long process.”