The Zoono Group Ltd (ASX: ZNO) share price has been a strong performer on Wednesday.
The global biotech company's shares were up as much as 12% to $1.42 at one stage.
In late trade they have given back some of these gains, but are still up around 4% to $1.32.
Why did the Zoono share price rocket higher today?
Investors were buying the company's shares today after it announced that it has entered into an Exclusive Distribution Agreement with Al Rabban Capital for the distribution of Zoono products in the Middle East and North Africa.
Zoono's products include scientifically-validated, long-lasting, and environmentally-friendly antimicrobial solutions. These comprise sprays, wipes, and foams suited for skin care, surface sanitisers, and mould remediation treatments.
Al Rabban Capital is a leading provider of professional services with extensive networks, investments, and distribution channels in the MENA Region. It is based in Doha, Qatar.
According to the release, management believes the agreement with Al Rabban Capital demonstrates the international demand for Zoono's technology and its ability to be part of the solution against the spread of viruses and bacteria. This is particularly the case given the ongoing spread of coronavirus globally.
What are the terms?
The two parties have signed a five-year agreement with a right of renewal for a further five-years.
The deal gives Al Rabban Capital exclusive distribution rights to B2B and consumer retail markets in the Middle East and North Africa, with the exception of several smaller countries due to existing relationships.
There will be minimum annual purchases of NZ$4.8 million in the first 12 months, NZ$8 million in year two, NZ$12 million in year three, and then 10% per annum increases thereafter. The initial order lodged by Al Rabban Capital is for NZ$2.4 million.
Management also advised that the company does not have any supply issues for large quantities at this stage. Its production will be funded from its existing cash reserves and it has sufficient resources, including people, to supply Al Rabban in accordance with the agreement.
