QRSciences purchases Q Video Systems

QRSciences (ASX: QRS) (QRSNY:PK) is pleased to announce that it has completed the purchase of the business and key assets of Q Video Systems.

Q Video Systems is a direct seller and distributor of surveillance and monitoring equipment, including closed circuit television (CCTV) security cameras, digital video recorders (DVR) and related components. Since its establishment in March 2005, the business hasgrown rapidly with revenue in FY06 of $5M and an expectation for year-on-year growth over the next two years of 100% per annum to approximately $10M in FY07 and $ 20M in FY08. The commitment from QRSciences will allow Q Video Systems to fully participate in the rapid growth being experienced by the Australian security products market, which is now estimated to exceed $150M per annum. Q Video Systems management has indicated that its goal is to capture 20% of the Australian market over the next three years. This will be accomplished through an expanded product range, organic growth on the east coast and the establishment of sales offices in Western Australia, South Australia and New Zealand.

"Q Video Systems is a highly complementary acquisition for us," said Kevin Russeth, Chief Executive Officer of QRSciences. "It delivers a significantly enhanced presence in the broader security market and, through its well-established sales and distribution capability in Australia and across the Southeast Asian region, the means to accelerate the uptake of QRSciences' own proprietary technologies. Further synergies attach to QRSciences' interest in Spectrum San Diego, Inc. (Spectrum) the designer of electronic imaging systems whose SentryScope™ camera is already distributed by Q Video Systems in Australia.

"The SentryScope™ uses advanced line scan technology to achieve ultra high resolution surveillance video capturing 21 million pixels per image and covering a 90 degree field of view. The large volume of data allows zooming into sub-regions with extreme accuracy and clarity and is a particularly good solution for train stations, ports, stadiums, rail yards, nuclear and electrical power plants, border surveillance, parking lots and large commercial warehouse facilities and is one of several products that Spectrum have developed.

Q Video Systems currently employs over 20 people and has warehouse and office facilities in Melbourne, Sydney and Brisbane. The business was established and managed by Rick Stokes, a 17-year veteran of the Australian security industry. Mr. Stokes is a pioneer in the CCTV industry in Australia and the founder of the first low cost CCTV distributor, Vicam CCTV Systems which was subsequently sold to Hills Industries. After Vicam's acquisition he became the General Manager of Hills' CCTV business unit which he helped grow to capture 40% market share in Australia and New Zealand. Mr. Stokes has extensive contacts at senior management levels in the video security industry worldwide and has been able to recruit key members of his former team to the Q Video Systems business.