17th Nov 2006 07:02
Spice PLC17 November 2006 17 November 2006 SPICE PLC ACQUISITION OF APOLLO HEATING LIMITED AND EXTENSION OF BANKING FACILITIES Spice plc ("Spice" or the "Group") is pleased to announce the acquisition ofApollo Heating Limited ("Apollo") for a total initial consideration of £9.65million, representing a multiple of 8.4 times 2006 operating profit. Apollo willform the foundations of a new Public Services Division of Spice plc. Apollo installs, services and maintains gas appliances and heating systems indomestic and commercial properties owned by social housing bodies and localauthorities. It currently has service and maintenance agreements coveringapproximately 70,000 properties, such agreements typically being for periods ofbetween 3 and 5 years. The range of services provided includes the annualreview of appliances and systems and the production of certificates forlandlords confirming compliance with safety regulations. The Initial Consideration is subject to adjustment based on the working capitalat completion, though there will be a total cap on the maximum totalconsideration of £10.65 million. The initial consideration will be payable incash at completion with the adjustment for working capital being paid followingthe production and agreement of completion accounts. At the same time, the Grouphas extended its banking facilities by £10 million to £70 million. Apollo has been established for over 10 years and is wholly owned by itsdirectors. Two of the three current directors of the business will be remainingwith the business following the acquisition and Ken Maclean, the Chairman, willbe retained as a Consultant. Apollo employs approximately 180 people, including121 CORGI registered gas engineers. Its client base is predominantly based inthe north of England and Wales. The consolidated audited accounts of Apollo for the year ended 31 August 2006show turnover of £11.1 million and operating profits of £1.15 million. Netassets of Apollo at 31 August 2006 were £1.5 million (including cash balances).The Initial Consideration of £9.65 million payable at completion represents amultiple of 2006 operating profits of 8.4 times. Simon Rigby, Chief Executive of Spice, said: "The acquisition of Apollo gives us access to a specialised part of the socialhousing sector. Its activities have similar characteristics to much of the restof Spice - multiple tasks carried out for larger clients in a domestic setting.Like much else we do, this is a business which operates in a regulatedenvironment where work is driven by statute or regulation and the work force hasa high skill level. We believe Apollo is an excellent first step into the social housing sector andwe believe there is considerable scope to grow the business further and offeradditional services such as electrical installation and maintenance to Apollo'sclient base. Additionally, there will be opportunities to extend Apollo'sactivities to enhance the range of services we offer to our existing clientswithin our Commercial Services Division." Shaun Maclean, Managing Director of Apollo, said: "We believe that becoming part of Spice will enable us to grow in a way that wasnot possible as a family business and to offer our clients additional serviceswhich, to date, we have been unable to do. We look forward to working withSpice to continue to develop Apollo as one of the leading businesses of itskind." - Ends - For further information, please contact: Spice plc Tel: 0113 384 3838 Simon Rigby, Chief Executive OfficerOliver Lightowlers, Group Finance DirectorCarl Chambers, Corporate Development Director Financial Dynamics Limited Tel: 020 7831 3113 Billy Clegg www.spiceplc.com www.apollo-heating.co.uk NOTES TO EDITORS Spice plc Spice is a support services business operating in the Commercial Services,Public Services and Utility Services sectors. The Group's operations werefounded in 1996 and have their origins in the electricity industry, though therange of activities has since been expanded into the water sector, nichetelecommunications services, the public sector energy management and commercialfacilities management. Spice's businesses have a common theme of delivering andco-ordinating infrastructure services to customers, and the technologicalelement within the product mix has been built up significantly over the courseof the last three years. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Spire Healthcare