25th Sep 2007 15:00
Spice PLC25 September 2007 25 September 2007 Spice plc Acquisitions of GMT Holdings Limited and Mechanical and Electrical Training Company Limited Spice plc ("Spice" or "the Group"), the provider of outsourced infrastructuresupport services to the Commercial, Public and Utility Sectors, is pleased toannounce the acquisitions of GMT Holdings Limited and Mechanical and ElectricalTraining Company Limited. These acquisitions will both become part of Spice's Public Services division andfurther extend the national footprint of Spice's gas business as well asenhancing and supporting the supply and retention of skilled engineers in theGroup. Mechanical and Electrical Training Company Limited The acquisition of Mechanical and Electrical Training Company Limited ("MET") isfor an initial cash consideration of £4.0 million. The price paid represents amultiple of 4.95 times adjusted operating profit for the year ended 31 January2007. Additional contingent cash consideration will be payable for the 24 monthperiod ending 31 August 2009 based on the performance of MET over that period.This consideration will be calculated as a multiple of 4.0 times operatingprofits for the 14 months ending 31 October 2008 and a multiple of 3.0 timesoperating profits for the 10 months ending 31 August 2009. The initial consideration is subject to adjustment based on the working capitalat completion with a maximum adjustment of £0.6m becoming payable following theproduction and agreement of completion accounts. There will be a cap on themaximum total consideration payable, including contingent consideration and theworking capital adjustment, of £15.6 million. MET was established in 2002 and is principally owned by its directors, AndrewMacDonald and Leslie Wilson and Atlas Trust Company (Jersey) Limited. BothAndrew MacDonald and Leslie Wilson will remain with the business following theacquisition. MET employs 59 people. MET provides training services to learners in the plumbing, electrical, gas, andheating (including renewable energy installations) sectors. These learners aretypically either self funded or part of publicly funded or employer supportedtraining arrangements. MET has a well developed, nationally recognised and accredited syllabus anddraws learners from across the UK to its dedicated training centre in Rotherham. MET also assists learners with course related work placements and with findingpermanent employment upon attaining qualifications. The unaudited financial statements of MET for the year ended 31 January 2007show turnover of £3.7 million and adjusted operating profits of £0.8 million.Net assets at 31 January 2007 were £0.5 million. GMT Holdings Limited The acquisition of GMT Holdings Limited and its wholly owned subsidiary, GasMaintenance and Training Limited (together "GMT"), is for an initial cashconsideration of £2.5 million. The price paid represents a multiple of 6.2 timesadjusted operating profit for the year ended 30 June 2007. Additional contingentcash consideration of 3.0 times operating profit for the 12 months ending 31August 2008 will also be payable based on the performance of GMT over thatperiod The initial consideration is subject to adjustment based on the working capitalat completion with a maximum adjustment of £0.05 million becoming payablefollowing the production and agreement of completion accounts. There will be acap on the maximum total consideration payable, including contingentconsideration and the working capital adjustment, of £5.05 million. GMT was established in1998 and is owned by Andrew MacDonald and Atlas TrustCompany (Jersey) Limited. Andrew MacDonald is one of two current directors ofGMT and will be remaining with the business following the acquisition. GMT installs, services and maintains gas appliances and heating systems in over19,000 domestic and commercial properties owned by social housing bodies andlocal authorities in South Yorkshire and the North Midlands. Service andmaintenance agreements are typically for periods of between two and five years.The range of services provided includes the annual review of appliances andsystems, the production of certificates for landlords confirming compliance withsafety regulations and any related servicing and repairs. GMT employs 38 peopleincluding approximately 25 CORGI registered gas engineers. The unaudited financial statements of GMT for the year ended 30 June 2007 showturnover of £2.1 million and adjusted operating profits of £0.4 million. Netassets at 30 June 2007 were £0.1 million. Simon Rigby, Chief Executive Officer of Spice, said: "The acquisition of GMT strengthens our Public Services division and means thatour operational capability is now extended to also cover South Yorkshire and theNorth Midlands. Spice remains committed to its strategy of achieving nationalcoverage in the UK market, using established regional businesses and brands. Across the Public Service division, we now have access to nearly 340 CORGIregistered gas engineers which provides us with an excellent platform to provideour clients with a responsive and effective service. The acquisition of MET will provide our Public Services division with a readysupply of 'best in class' gas, plumbing and heating engineers whilst offering asustainable and growing entry into the training market. MET offers significant opportunities for cross selling and the prospect offurther strengthening, supporting and adapting the skills of our workforcethroughout Spice. The introduction of new training modules (not least in support of ourElectricity business), widening the marketing and increasing regulatoryrequirements provides a solid foundation for the future of MET as part of Spice. Both acquisitions are valuable additions to the Group in their own right (and weexpect to grow both GMT's and MET's profits over the current year) but also marksignificant platforms for us to enter the commercial gas market and also tosupport National Grid Gas further." Andrew MacDonald, Managing Director of both GMT and MET, said: "Both GMT and MET are delighted to be joining Spice, which provides an excellentplatform and opportunity to achieve the business ambitions for both companies.I believe there are substantial opportunities for us with MET becoming a "private training" market leader offering sustainable opportunities and furtherdevelopment to both staff and learners alike, and GMT sustaining a market growthstrategy based on quality service delivery. Our gas business will add further coverage to the existing Spice operations andprovides GMT with access to a much wider resource base. We have been impressedby the commitment to training across the Spice group and I believe MET willcontinue to grow its training activities within Spice." 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 support services business operating in the Commercial Services,Public Services and Utility Services sectors. The Group's operations werefounded in 1996 and have their origins in the electricity industry, though therange of activities has since been expanded into the water sector, nichetelecommunications services, the public sector energy management and commercialfacilities management. Spice's businesses have a common theme of delivering andco-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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