12th Sep 2005 07:02
Spice Holdings PLC12 September 2005 WIRE-LINE ACQUSITION STRENGTHENS TELECOMS DIVISION Spice Holdings plc ("Spice" or the "Group") is pleased to announce theacquisition of Hutchison Communication Systems Limited ("Hutchison UK") and itssubsidiary company Hutchison Communication Systems (France) SARL ("HutchisonFrance") (together "Hutchison") for an initial consideration of £1.1 millionpaid in cash at completion. Deferred consideration of up to £3.9m will also bepaid in cash, depending on the earnings of Hutchison in the 12 months to 28February 2007. The total consideration payable for Hutchison will not exceed£5.0m. Hutchison provides maintenance support, installation and commissioning servicesto the wire line telephone operator market in the United Kingdom and Europe. Itscustomers include leading networking and telecommunications equipment suppliersas well as voice and data network operators. The directors of Spice believe thatthis is a market that is still rapidly expanding year on year and one that isincreasingly using third party outsourced support services to reduce base costsand improve network uptime and hence overall efficiency. In the year to 30 November 2004, Hutchison UK generated turnover of £1.5million, operating profit of £305,000 and pre-tax profit of £294,000. Net Assetswere £614,000. In the year to 31 December 2004, Hutchison France generatedturnover of £621,000, operating profit of £47,000 and pre-tax profits of £47,000(after conversion from Euros at the average rate prevailing for the year to 31December 2004). Net Assets were £38,000. Hutchison did not produce consolidatedaccounts. The initial consideration represents a multiple of 3.1 timesaggregated operating profits and the maximum multiple payable on the deferredconsideration element will be 7 times aggregated pre-tax profits. Hutchison will form part of the Team Telecom operation within the TelecomsServices Division of Spice. The joint owners of Hutchison, Alan Hutchison andPat O'Keeffe will remain with the business. Simon Rigby, Chief Executive Officer of Spice, said: "The wire-line networkoperator maintenance market is sizeable and growing and this acquisitionprovides an ideal entry route into the sector. There are many similaritiesbetween Hutchison and Team Telecom and the skills bases of the two businessescross over nicely. We believe that the acquisition will strengthen Team Telecom,providing recurring revenue streams, and, as part of a larger telecoms groupwith greater resources and skills, enable Hutchison to expand its activitieswith existing clients and attract new clients. We are delighted to welcome AlanHutchison and Pat O'Keeffe to the Group." For further information, please contact: Spice Holdings plc Tel: 0113 384 3838Simon Rigby, Chief Executive OfficerCarl Chambers, Corporate Development Director Rawlings Financial PR Limited Tel: 01756 770 376Catriona Valentine NOTES TO EDITORS Spice Holdings plc Spice is a support services business operating in the utilities and facilitiesmanagement sector. The Group's operations were founded in 1996 and have theirorigins in the electricity industry, though the range of activities has sincebeen expanded into the water sector, niche telecommunications services ,thepublic sector and commercial facilities management. Spice's businesses have acommon theme of delivering and coordinating infrastructure services tocustomers, and the technological element within the product mix has been builtup significantly over the course of the last three years. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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