Mainboard-listed Sarine Technologies has signed a non-binding memorandum of understanding (MOU) to purchase a majority share in Gem Certification & Assurance Lab, Inc (GCAL) for an all-cash consideration.
The purchase is subject to due diligence reviews, as well as reaching and executing a definitive agreement. It will not fall under the definition of a “major transaction” under the Singapore Exchange’s (SGX) listing rules.
GCAL is a New York gemological laboratory founded in 2001 by diamond industry veteran Don Palmieri and his wife, Pamela. Don is also the president of GCAL.
GCAL provides services such as the grading and certification of natural and lab-grown diamonds as well as coloured diamonds, coloured gemstones, pearls and precious metals. It is the only diamond and gemstone ISO 17025 accredited forensic laboratory in the world. Its diamond certificate is also the only diamond report that is backed by the industry exclusive Zero Tolerance 4C's Consumer Guarantee.
GCAL now operates as a family-owned business in New York City’s famous Diamond Way, which is located at the corner of Fifth Avenue and 47th Street.
The Palmieris’ son, Angelo, is GCAL’s chief operating officer (COO).
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Following Sarine’s acquisition, GCAL’s principals will continue to run the company. The lab will also continue its business as before.
According to Sarine, GCAL, which has always operated out of a single location in New York, will now be able to develop its services globally with the help of the former’s technology.
Sarine and GCAL will exclusively cooperate on serving North American customers, as well as on offering the industry business-to-business (B2B) reports for generic non-branded diamonds.
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At the same time, Sarine will continue to offer its services independently to its high-end branded luxury customers outside the US. It will also continue seeking mutually beneficial cooperative arrangements in additional geographies.
“We believe in doing things the right way, not the easy way... Our aim is to provide accurate and consistent gemological services with uncompromising integrity and unparalleled customer care,” says Don Palmieri.
“Sarine's introduction of its artificial intelligence (AI)-derived and cloud-based eGrading has, for the first time ever, provided us with the means to resolve our conundrum of how to expand our business both locally and overseas beyond our immediate control, without compromising on our principles”,” he adds.
"We believe experts should stand behind their work, and that's why we issue Grading Certificates, not just grading reports. Our certificates come with a money-backed guarantee so you can feel good knowing you got exactly what you paid for. Sarine's technologies will allow us to continue to abide by this key code of ethics, while still expanding our services to meet the growing demand by consumers seeking confidence that their acquired products and services meet all norms of quality and sustainability,” says Angelo Palmieri.
“We are thrilled by this opportunity to join forces with and acquire a major position in GCAL. I am confident that GCAL, leveraging Sarine’s technologies, will now be able to increase its market presence, to the benefit of the industry in general and to US consumers, in particular, without degrading from their industry-unique principles of guaranteed quality and consistency,” says David Block, CEO of Sarine.
“No less importantly, Sarine will gain access to the Palmieris' decades-long experience in managing a gem lab with the highest standards possible, and will gain a recognised and respected channel through which to offer the expansive key US retail industry its grading technologies, to the benefit of retailers and consumers alike,” he adds.
Shares in Sarine closed 1 cent higher or 2.25% up at 45.5 cents on Jan 11.