Acquisition

Interior Services Group PLC

("ISG" or "the Group")

Acquisition of the French branch of Paris based retail design and fit out company Alpha International SARL

ISG is pleased to announce that it has completed the acquisition of the goodwill and business assets of the French branch of Alpha International SARL ("Alpha") for an initial consideration of £1.5m. The maximum consideration of €8.5m (£7.4m) is dependant upon future performance. Alpha is a retail design and fit out specialist based in Paris servicing international retail companies. The principal vendor, André Bernstein, will remain with the business.

Alpha has delivered multiple projects for an impressive client list including Apple, Louis Vuitton, Uniqlo, Gucci, Tiffany & Co. and Patek Phillipe. In addition to its core French market, Alpha has also delivered projects for clients in Italy and Switzerland.

Alpha's turnover for the year ended 31 October 2010 was approximately £6.5m and generated a contribution of approximately £0.2m. Alpha has net assets of approximately £0.4m at completion and employs 20 people.

The acquisition of Alpha will enable ISG to:

·; Accelerate the growth of ISG's existing European retail fit out business;

·; Provide a design and fit out turnkey solution for the Group's international retail customers in France and Italy;

·; Further strengthen its management team with people who have a successful retail design and fit out track record in Europe.

At completion £1.5m will be paid in cash. A maximum further consideration of approximately £5.9m is deferred and payable after the two financial years to 30 June 2013, conditional on the business meeting average profit before tax targets for the two years. The deferred consideration will be settled 80% in cash and the balance in new ISG ordinary shares.

ISG's existing European retail fit out offering is being integrated with Alpha, and André Bernstein, with his 30 years of retail experience, has been appointed Managing Director of the combined European retail fit out business.

David Lawther, Chief Executive, said:

"The Alpha acquisition is a key part of our continuing international expansion strategy and we are delighted to have acquired this capability within ISG. The acquisition will widen our international retail client base and provide a broader retail service offering to our clients in Europe." 

28 October 2011

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