11th Dec 2007 07:19
Spice PLC11 December 2007 11 December 2007 Spice plc Acquisition of Gas Heating UK Limited Spice plc ("Spice" or "the Group"), the provider of Total Utility SupportServices, is pleased to announce the acquisition of Gas Heating UK Limited and,its subsidiary undertaking, Gas Call Services Limited (together "GCS"). GCS willform part of our Gas Services business and extends our national geographicfootprint into Scotland. The acquisition of GCS is for an initial cash consideration of £2.25 million.The price paid represents a multiple of 8.2 times operating profit for the yearended 31 August 2007. Additional contingent cash consideration of 8.5 timesoperating profit for the 12 months ending 31 October 2008, less the £2.25million initial cash consideration, will also be payable depending on theperformance of GCS over that period. The initial cash consideration is subject to adjustment based on the workingcapital at completion with a maximum amount of £0.45 million becoming payablefollowing the production and agreement of completion accounts. There will be acap on the maximum total cash consideration payable, including contingent cashconsideration and the working capital adjustment, of £6.45 million. Headquartered in Glasgow, the business was established in 1996 and is owned byMike Donnelly, Terry Maclean and three trusts. Mike Donnelly will remain with,and as a director of, the business following the acquisition. GCS installs, services and maintains gas appliances and heating systems in over25,000 domestic and commercial properties owned by social housing bodies andlocal authorities predominantly located in Scotland but also in West Yorkshire.Service and maintenance agreements are typically for periods of between two andfive years. The range of services provided includes the annual review ofappliances and systems, the production of certificates for landlords confirmingcompliance with safety regulations and any related servicing and repairs. GCSemploys 140 people including approximately 100 CORGI registered gas engineers. The unaudited financial statements of GCS for the year ended 31 August 2007 showturnover of £6.8 million and operating profits of £0.28 million. Net assets at31 August 2007 were £1.0 million. Simon Rigby, Chief Executive Officer, of Spice, commented: "The acquisition of GCS strengthens our Gas Services business, extends ouroperational capability and is in line with our strategic growth plans for thissector. Our new bases in Scotland provide the Group with a sound footing forfuture development of both new and existing workloads. Spice remains committedto its strategy of achieving national coverage in the UK gas market, usingestablished regional businesses and brands, in order to address the Gas MeterOperations and Commercial Gas Maintenance markets. Across our Gas Services business, we now have access to nearly 440 CORGIregistered gas engineers which provides us with an excellent platform to provideour clients with a responsive and effective service. The GCS acquisition is avaluable addition to the Group." Mike Donnelly, Managing Director of GCS, commented: "I am pleased that GCS is joining Spice's Gas Services business. This is agreat opportunity to grow the business further with the support of a largergroup. GCS will now meet its aspirations of becoming part of a national gasservice provider, offering a quality and competitive service to our broad rangeof clients." Ends Enquiries: Spice plc Tel: 0113 384 3838Simon Rigby, Chief Executive OfficerOliver Lightowlers, Group Finance DirectorCarl Chambers, Corporate Development Director Financial Dynamics Tel: 020 7831 3113Billy CleggCaroline Stewart KBC Peel Hunt (Nominated Adviser and Broker) Tel: 020 7418 8900Julian Blunt NOTES TO EDITORS Spice plc Spice is a support services business providing Total Utility Support Services.The Group's operations were founded in 1996 and have their origins in theelectricity industry, though the range of activities has since been expandedinto the water sector, niche telecommunications services, the public sector,energy management and commercial facilities management. Spice's businesses havea common theme of delivering and co-ordinating 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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