5th Sep 2005 07:02
Spice Holdings PLC05 September 2005 ACQUISITION AND CONDITIONAL PLACING Spice Holdings plc ("Spice" or the "Company") is pleased to announce theacquisition of Circle Britannia Limited ("Circle Britannia") and ServiceLine(Nationwide) Limited ("ServiceLine") for an aggregate consideration of £15.0million (the "Acquisition") and the conditional placing by KBC Peel Hunt Ltd of7,009,346 new ordinary shares of 10 pence each in the Company at a price of 214pence per new ordinary share (the "Placing Shares") with institutional and otherinvestors to raise approximately £15.0 million - approximately £14.5 millionafter expenses - (the "Placing"). KBC Peel Hunt has also conditionally placedwith institutional and other investors 586,144 existing ordinary shares onbehalf of certain shareholders in the Company at a price per existing ordinaryshare of 214 pence. The Placing has been fully underwritten by KBC Peel HuntLtd. Key points: * Acquisition of two profitable, nationwide, commercial facilities management businesses - Circle Britannia and ServiceLine - for £15.0 million, funded through bank debt * Acquisition moves Spice into new sector, which the Directors believe is fast growing, offers significant future potential and provides the Group with excellent cross selling opportunities * Circle Britannia and ServiceLine had an aggregated operating profit before interest, tax and amortisation of £1.5 million in the year to 31 January 2005 * Conditional placing of 7,009,346 million new ordinary shares of 10 pence each at 214 pence per share to raise approximately £15.0 million * Placing funds, after expenses, will be used to re-pay draw-down on the Company's bank debt facilities in order to maintain acquisition funding credit facilities * Admission to trading on AIM of the Placing Shares is expected to take place on 7 September 2005 Circle Britannia Circle Britannia is a provider of outsourced facilities services to corporateclients and reinstatement services for major insurers. The business is splitinto three divisions: - the reactive division provides planned and reactive Mechanical & Electrical ("M&E") and fabric maintenance services; - the small works division was created due to the demand of a number of its clients to perform small project based works, which are not day to day repairs; and - the claims division deals with the management of insurance claims on behalf of major insurance companies. Major customers of Circle Britannia include Norwich Union, Starbucks,Waterstone's and Dixons. Circle Britannia generated revenues of approximately£16.2 million in the year to 31 January 2005 and had net assets of approximately£1.3 million. ServiceLine ServiceLine provides outsourced maintenance helpdesk services delivered eitheras part of an integrated facilities management service, incorporating CircleBritannia's facilities service operation, or as a stand alone service managingclient's existing suppliers. Major customers of ServiceLine include Starbucksand Waterstone's. ServiceLine generated revenues of approximately £1.0 millionin the year to 31 January 2005 and had net assets of approximately £0.4 million. Together, the businesses had an aggregated operating profit before interest, taxand amortisation ("EBITA") of £1.5 million in the year to 31 January 2005. Theconsideration represents a multiple of 9.5 times the aggregated statutoryoperating profits for the year to 31 January 2005. Rationale for the Acquisition As part of the Company's strategy to continue its development through organicgrowth and acquisition opportunities, the Acquisition provides Spice with abridgehead into the commercial facilities management sector via the acquisitionof two profitable businesses. The Directors believe that this is a fast growingsector with significant future potential and believe that, as part of theenlarged Spice group, both Circle Britannia and ServiceLine will more readily beable to grow and take advantage of their position in the sector. Through the Acquisition, Spice will add a number of high profile clients to itsclient base, including Norwich Union and Starbucks. The addition of such clientsto Spice's client base presents an excellent opportunity to cross sell theCompany's other services to these large corporates. The Directors also believethat the addition of Circle Britannia and ServiceLine to the Spice group ofcompanies will provide opportunities to offer facilities management services toits existing client base. The Acquisition The consideration for the Acquisition, equal to £15.0 million plus associatedacquisition costs and a payment of £0.3 million representing the estimatedexcess of working capital at completion over agreed normal working capital, hasbeen funded today from the Company's existing bank facilities. In order tomaintain the Company's current levels of debt facilities at pre-Acquisitionlevels, thereby preserving its acquisition funding credit facilities, thePlacing has been undertaken to re-pay the draw-down on the Company's facilities. The Placing Under the terms of the Placing, 7,009,346 million new ordinary shares have beenconditionally placed at a price of 214 pence each. Application has been made toLondon Stock Exchange plc for the admission of those shares to trading on AIM("Admission"). Admission to AIM of the Placing Shares is expected to take placeon 7 September 2005. A Placing of 586,144 existing ordinary shares of 10p each is also beingundertaken under which John Taylor and Carl Chambers, both Directors of Spiceare selling 10,000 and 100,000 shares respectively. Completion of the Placing is subject only to Admission and the placing andunderwriting agreement entered into between, inter alios the Company and KBCPeel Hunt Ltd becoming unconditional in all other respects. The Placing Shareswill rank pari passu in all respects with the existing issued ordinary shares inSpice (including the right to receive all dividends and other distributionsdeclared thereon following Admission). The Placing Shares will not be entitledto the final dividend which was declared on 21 July 2005 and which will be paidon 20 September 2005 to shareholders on the register of members on 9 September2005. Simon Rigby, Chief Executive Officer, said: "We have stated our desire to find asuitable acquisition in this sector and believe that the acquisition of CircleBritannia and ServiceLine represents a one-off opportunity to buy a profitablecommercial facilities management business which operates on a truly nationwidebasis. Furthermore, the activities of Circle Britannia and ServiceLine have manysimilarities to those carried out by our Electricity Services Division, whichmaintains and renews both electrical and building infrastructure within theutility sector. The Board believes that Circle Britannia and ServiceLine will bea valuable addition to the Group, enabling us to extend further our capabilitiesin this area. "We are particularly pleased that Lawrence Green, who founded Circle Britanniaand ServiceLine, and his senior management team are joining the Group. They arehighly regarded in this sector. Their addition to the Spice team will enable usto grow the Group's activities in a new market place, whilst continuing tomaintain excellent standards of service amongst our existing clients." For further information, please contact: Spice Holdings plc Tel: 0113 384 3838Simon Rigby, Chief Executive OfficerOliver Lightowlers, Group Finance DirectorCarl Chambers, Corporate Development Director Rawlings Financial PR Limited Tel: 01756 770 376John RawlingsCatriona Valentine KBC Peel Hunt Ltd Tel: 020 7418 8900Simon HayesMatt Goode NOTES TO EDITORS Spice Holdings plc Spice is a support services business operating predominantly in the utilitiessector. The Group's operations were founded in 1996 and have their origins inthe electricity industry, though the range of activities has since been expandedinto the water sector, niche telecommunications services and the public sector.Spice's businesses have a common theme of delivering and coordinatinginfrastructure services to customers (typically in regulated industries), andthe technological element within the product mix has been built up significantlyover 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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