5th Dec 2007 07:01
Spice PLC05 December 2007 5 December 2007 Spice plc Acquisition of Saturn Energy Limited Spice plc ("Spice" or "the Group"), the provider of total utility supportservices, is pleased to announce the acquisition of Saturn Energy Limited ("Saturn"). Following the acquisition, Saturn will form part of our energymanagement business. The acquisition of Saturn is for an initial cash consideration of £3.5 million.Additional contingent consideration will be payable based on Saturn's resultsfor the years ending 30 April 2008 and 30 April 2009 respectively. Theadditional contingent consideration will be capped at £4.75 million. Interestwill be payable on the additional consideration, capped at a maximum of £0.4million. The initial consideration is subject to adjustment based on the working capitalat completion subject to an overall cap of £0.35 million following theproduction and agreement of completion accounts. The total consideration payable(including the initial consideration, the additional contingent consideration,the working capital adjustment and the interest) is capped at £9.0 million. The audited financial statements of Saturn for the 11 months ended 30 June 2007show turnover of £1.4 million and adjusted operating profits of £0.8 million.Net assets at 30 June 2007 were £0.1 million. On this basis, extrapolating the11 months results to a full year, the initial consideration represents amultiple of 4 times historic operating profit. However, following theacquisition of Saturn, the revenue recognition policies of Saturn will bechanged in order to bring them in line with the more conservative policies ofSpice's Inenco business so that revenues will be spread evenly over the life ofthe relevant contract rather than accounted for in the year that the contract issigned. It is estimated that amending the accounting policy to bring it in line withthat of Inenco would have produced operating profits of £0.5 million in the yearto 30 April 2007, such that the initial consideration would represent a multipleof 7.5 times historic operating profit. Saturn, based in Liverpool, is a commercial energy broker focused on the Smalland Medium Enterprise ("SME") sector. It acts as agent for SME's to procure gasand electricity from suppliers under medium and long term contracts and employs11 people. It was established in 1999 by its directors, Thomas McInerney,Michael McInerney and Roger Askew. Following the acquisition, Roger Askew willbe remaining as a director and Thomas and Michael McInerney will be retained ona consultancy basis. Simon Rigby, Chief Executive Officer of Spice, said: "The acquisition of Saturn enables us to extend the range of our energybrokerage services into the SME sector where its expertise is valued both bycustomers and suppliers. We intend that Saturn will continue to operate as italways has done but that its services will be enhanced by working alongsideInenco. The market for the procurement of energy in the SME sector hastraditionally been fragmented and the acquisition of Saturn will provide us witha strong and proven model to enable us to build our presence in this sector". Roger Askew, Director of Saturn said: "We believe that joining Spice will allow us to develop our business in the SMEsector and to continue to provide our customers with a high quality serviceenhanced by the ability to utilise the wider resources of Inenco. It shouldprovide us with an opportunity to consolidate our position in the sector". 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 Tel: 020 7418 8900Julian Blunt NOTES TO EDITORS Spice plc Spice is a utility infrastructure support services business. The Group'soperations were founded in 1996 and have their origins in the electricityindustry, though the range of activities has since been expanded into the watersector, niche telecommunications services, the public sector, energy managementand facilities management. Spice's businesses have a common theme of deliveringand co-ordinating infrastructure services to customers, and the technologicalelement within the product mix has been built up significantly over the courseof the last three years. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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