9th May 2005 07:01
The Vitec Group PLC09 May 2005 FOR IMMEDIATE RELEASEThe Vitec Group plc9 May 2005 The Vitec Group plc Acquisition of Kata Introduction The Vitec Group plc ("Vitec" or the "Group") announces that it has signed anagreement to acquire the business and assets of Kata International Limited andKata Professional (Kimchi & Tishler) Limited ("Kata"), the designer andmanufacturer of premium protective carrying bags for cameras and accessories inthe photographic and broadcast markets, for an initial cash consideration ofUS$8.0 million (£4.2 million) and deferred consideration of up to US$13 million(£6.9 million) conditional upon future sales and profitability targets (the "Acquisition"). The Board of Vitec believes that the Acquisition will add a profitable photo andvideo accessory company with a high quality brand image to the Group. BogenImaging, the distribution arm of the Group's Photographic Division, alreadysells Kata's bags and the Group has built a sound understanding of Kata and itssuccessful management team in recent years. Kata also supplies a range of bagsfor Manfrotto's tripods. Following the Acquisition, Kata will be integrated intothe Group's Photographic Division. The Acquisition will be funded from existing resources and is expected to beimmediately earnings enhancing (see note 1). Commenting on the Acquisition, Gareth Rhys Williams, Chief Executive of Vitec,said: "The Board feels that the manufacture of video and photographic bags willenhance the range of accessories that we already produce. With the additionalbenefits of distribution to third party dealers through Bogen Imaging, theacquisition has the potential to generate attractive returns for the Group'sshareholders. We look forward to working with Kata even more closely in thefuture." Information on Kata Kata designs, develops, manufactures and markets high quality products whichintegrate smart protection solutions with innovative carrying systems. Kata'sline of products includes cases for cameras and accessories in the photographicand broadcast markets as well as backpacks and vests for personal protection. In the year ended 31 December 2004 Kata generated profit before tax of US$1.1million (£0.6 million). Net assets as at 31 December 2004 were US$1.1 million(£0.6 million). Kata is based in Jerusalem, Israel. For more information, see www.kata-bags.com Summary terms of the Acquisition Under the terms of the acquisition agreement, Vitec is acquiring the businessand assets and assuming certain liabilities of Kata for an initial net cashconsideration of US$8.0 million (£4.2 million) payable upon completion, which isexpected to take place by 31 May 2005. Deferred consideration of up to a maximum of US$13.0 million (£6.9 million) isalso payable on the achievement of certain annual sales and profitabilitytargets for 2005 - 07. The maximum deferred consideration will only becomepayable if turnover and profit before interest and tax in the year ending 31December 2007 exceed US$20.4 million (£10.8 million) and US$4.6 million (£2.4million) respectively. -Ends- Contacts: The Vitec Group plc Telephone: 020 8939 4650Gareth Rhys WilliamsAlastair Hewgill Financial Dynamics Telephone: 020 7269 7291Rob GurnerRichard Mountain Notes to Editors About The Vitec Group plc The Vitec Group plc supplies a wide range of equipment and services to thebroadcasting, entertainment and photographic industries. Its products aredistributed in nearly 100 countries, either through dealerships or direct to theend user or corporate sector, and it has manufacturing facilities in fourcountries. The Vitec Group is a major force in its chosen specialised fields. More information can be found at: http://www.vitecgroup.com. Note 1 This statement should not be taken to mean that earnings per share of The VitecGroup plc will necessarily exceeded historic earnings per share of The VitecGroup plc and no forecast is intended or implied. Note 2 All values in pounds sterling have been calculated using the exchange rate: £ 1:1.89 US$ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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