19th Apr 2006 07:01
Regus Group PLC19 April 2006 19 April 2006 Regus Group plc ("Regus" or "the Group") Acquisition of Regus UK Regus, the leading global provider of outsourced office solutions, todayannounces that it has reached agreement for the acquisition of the 58% of the UKbusiness ("Regus UK") it does not already own from Rex 2002 Limited, a companycontrolled by funds managed by Alchemy Partners, for a cash consideration of£88.0 million. The acquisition is being funded by a new £50 million acquisition facility put inplace by The Royal Bank of Scotland plc, Lloyds TSB Bank plc and NationalAustralia Bank, and by a drawdown of £38 million from the £100m revolving creditfacility provided by the same banking syndicate and announced on 14 March 2006.At 31 March 2006 Regus UK had net cash balances of £26.6 million and in additionwas owed £5.0 million by Regus. Information on Regus UK Regus UK is the leading provider of serviced offices and business centres acrossthe UK comprising 91 business centres. At 31 December 2005 it had 25,000workstations and an occupancy of 70%. For the year ended 31 December 2005, under IFRS, Regus UK made £8.6 million ofEBITDA and a profit after tax of £0.5 million on sales of £161.4 million. At 31December 2005 it had net liabilities of £9.1 million with gross assets of £108.8million. Net cash was £21.8 million. Rationale for the acquisition As announced on 20 March 2006 in the Group's preliminary results for the year to31 December 2005, Regus has performed strongly across all its wholly ownedbusinesses with average occupancy of 80% for the Group in the second half ofFY2005 and annualised REVPAW of £6,180, over the same period. Regus Group's strategy is to generate profitable growth through improvedoccupancy and pricing, as well as opening new centres. The Group is increasingits market penetration around the world and delivering improved services,products and capabilities to its customers through greater size and reach.Whilst the UK business has continued to operate under the Regus brand, asignificant number of the Group's services, management systems and expertiseelsewhere in the world are not yet in the UK. The resumption of full controlover Regus UK will allow the Group to: • Utilise its considerable experience elsewhere in the world to bring pricing and occupancy improvements in line with the rest of the Group • Grow business centres, workstations and operating efficiencies in the highly fragmented UK marketplace through organic growth and acquisitions • Expand its new product offerings such as Network Access and Net Space in the UK • Significantly enhance its global reputation and footprint as the UK is one of the key global marketplaces • Obtain better marketing benefits from full integration of the global offering Financial effects Following the acquisition it is intended to re-launch the Regus brand andmarketing effort in the UK to drive up occupancy levels and margin. Theacquisition is expected to be earnings enhancing in FY2007. Commenting on the acquisition, Mark Dixon, Chief Executive of Regus, said: "This is a crucial strategic step enabling us to reunite our global centresunder direct control and strengthen our global footprint. We are excited aboutthe opportunity in the UK market place where we see a continued growth towardsthe adoption of alternative workplace strategies by corporate, small andmid-sized businesses. "The UK, along with the US, has always been at the forefront of the fundamentalchange in the way companies are managing their workforces. We are now in a greatposition to fully capitalise on these strong market trends." Enquiries: Regus Group plc 01932 895 135 Mark Dixon, Chief Executive Officer Stephen Gleadle, Chief Financial Officer Brunswick 020 7404 5959 Simon Sporborg / Robert Gardener This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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