6th Feb 2006 07:01
Spice Holdings PLC06 February 2006 6th February 2006 Spice Holdings plc ACQUISITION OF MAINTENANCE AND TECHNICAL SERVICES LIMITED IN ELECTRICITY SERVICES DIVISION Spice Holdings plc ("Spice" or the "Group") is pleased to announce theacquisition of Maintenance and Technical Services Limited ("Maintech") for aninitial consideration of £2,100,000 paid in cash at completion. Maintech, which will operate under the Freedom trading name and form part ofSpice's Electricity Services Division is headquartered in Ipswich, with officesin Downham Market and Birmingham. Its main area of expertise is working onPrivate Networks and its activities are focused on the installation andmaintenance of power networks (primarily high voltage) for commercial andindustrial clients across the United Kingdom. It has maintenance agreementswith almost 400 customers, the agreements typically covering a four year periodand renewing automatically on expiry. As well as the planned maintenanceprovided for under these agreements, Maintech carries out remedial and assetreplacement work on its customers' networks (such as transformer oil changes andswitchgear changes) and additional work to expand or reinforce those networks.Maintech also maintains 12 wind farms across the U.K. Around 80 per cent ofturnover is derived from customers with whom maintenance agreements are inplace. Additional to the £2,100,000 initial cash payment, consideration of up to£675,000 will be payable in cash subject to the earnings of Maintech in theyears to 30 April 2006 and 30 April 2007. The consideration is subject toadjustment based on the net assets at completion but with an overall cap onconsideration of £3,000,000. It is estimated that there will be approximately£170,000 of cash in Maintech at completion, before any payment in respect of thenet asset adjustment. Maintech was established in 1999 and 3 of the 4 directors will remain with thebusiness following the acquisition. It has two subsidiary companies, EasternPrivate Network Management Limited ("EPNM") and Maintenance and TechnicalServices (Midlands) Limited ("MTSM"), both of which are included in theacquisition. EPNM owns assets used in private power networks which are leasedto customers; MTSM is non-trading. Maintech does not produce consolidatedaccounts. Aggregated adjusted operating profits of Maintech for the year ended 30 March2005 were £549,000. The audited accounts show turnover of £4,211,514 andadjusted operating profit of £487,000. The un-audited statutory accounts of EPNMfor the year to 30 March 2005 showed turnover of £91,000 and operating profit of£62,000. Net assets of Maintech at 30 March 2005 were £478,000 and of EPNM,£362,000. The initial consideration of £2,100,000 payable at completionrepresents a multiple of adjusted aggregated operating profits of 3.8 times. Ifthe full amount of additional consideration were to be paid in respect of theyear to 30 April 2006, the total consideration payable of £2,775,000 wouldrepresent a multiple of aggregated adjusted operating profits of 5.1x. Simon Rigby, Chief Executive of Spice Holdings, said: "The acquisition of Maintech is another step in the development of ourElectricity Service Division as one of the leading players in the sector.Maintech has a super range of commercial and industrial clients and provides uswith some excellent opportunities to offer its services to our FacilitiesServices Division clients. Its customer base provides the Group with anexciting cross selling opportunity for our growing Energy Management business,as organic growth within our company accelerates. "We are delighted that three of the directors of Maintech will be joining us andlook forward to seeing the business grow and develop as part of Spice." Richard Jupp, Managing Director of Maintech, said: "We have known and worked with people in the Freedom business for many years andare excited to join a business focused on growth in the electrical servicesmarket." ...Ends... For further information, please contact: Spice Holdings plc Tel: 0113 384 3838Simon Rigby, Chief Executive OfficerOliver Lightowlers, Group Finance DirectorCarl Chambers, Corporate Development Director Financial Dynamics Limited Tel: 020 7831 3113Sally LewisBilly Clegg NOTES TO EDITORS Spice Holdings plc Spice is a support services business operating in the utilities and facilitiesmanagement sector. The Group's operations were founded in 1996 and have theirorigins in the electricity industry, though the range of activities has sincebeen expanded into the water sector, niche telecommunications services, thepublic sector and commercial facilities management. Spice's businesses have acommon 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. www.spiceholdings.com www.maintechservices.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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