25th Jan 2006 13:31
KBC Advanced Technologies plc25 January 2006 25 January 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN KBC Advanced Technologies plc ("KBC" or "the Company") Proposed Acquisition of TTS Performance Systems, Inc. for US$6 million and Placing to raise approximately £1.2 million IntroductionKBC Advanced Technologies plc, a leading consultant to the oil industry, today announces the proposed acquisition of TTS Performance Systems, Inc. and its sister company, Center for Process Plant Management, LLC (together "TTS") for an aggregate consideration of US$6 million (the "Proposed Acquisition"). Funding for the initial consideration payable in connection with the Proposed Acquisition will be obtained through a placing of 2,403,320 new Ordinary shares in KBC with institutional investors and the issue of further Ordinary shares in KBC to the vendors (the "Placing"). Details of the Proposed AcquisitionTTS is a private company operating in the areas of international process industry management consulting, training, and development. The company is based in Denver, Colorado. The gross assets attributable to TTS are estimated to be £0.9 million. For the year ended 31 December 2005, reported turnover for TTS was US$3.7 million and profit before tax US$0.6 million. Their order book going into 2006 was $15.5 million spread over four years. TTS provides services in the areas of performance management, competency assessment, training and consultancy on operating manuals and systems for clients in the process industries. The board of KBC anticipates that the Proposed Acquisition will allow KBC to offer an expanded scope of international services to meet the identified industry need for a single service provider. This will be achieved through: • Leveraging existing client relationships to increase contract scope• Enhancing KBC's offerings by including human performance improvement to aid effective implementation of KBC's recommendations• Expanding TTS's offering by inclusion of KBC technical know-how• Expanding TTS's reach into KBC's existing markets outside North America. In addition, the Proposed Acquisition is expected to enhance KBC's earnings in the first year of ownership. Terms have been agreed for the Proposed Acquisition and it is expected that the agreement will be executed later today. The existing shareholders of TTS are Jack A. Pankoff and certain members of his family. Mr Pankoff is currently President and CEO of TTS and on completion of the Proposed Acquisition, Mr Pankoff will become an employee of the KBC Group. The consideration of US$6 million payable pursuant to the Proposed Acquisition is to be satisfied:- • as to US$2 million, in cash on completion;• as to US$1 million, by the allotment of new Ordinary shares in KBC (the number of which is to be calculated by reference to the average closing price of the shares of KBC on the 20 dealing days prior to completion) (the "Consideration Shares"); and• as to the remaining US$3 million, by three annual payments of US$1 million in cash on each anniversary of completion. The deferred consideration is expected to be funded out of the future cash flows of KBC. In order to secure these payments, KBC will on completion enter into a pledge agreement with the vendors of TTS over the shares it acquires in TTS. Details of the PlacingKBC also announces that it has conditionally placed approximately 2.4 million new Ordinary shares in KBC (the "Placing Shares") at a price of 48 pence per Ordinary share (the "Placing Price") with institutional investors so as to raise approximately £1.2 million (before expenses). The Placing is not conditional upon the Proposed Acquisition. Arden Partners Limited is acting as financial adviser and broker to KBC in respect of the Placing. The placing is conditional on the Placing Shares being admitted to the official list of the UK Listing Authority and to trading on the London Stock Exchange's market for listed securities ("Admission"). The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the existing Ordinary shares in the Company. The Placing Shares are to be allotted by the Company pursuant to the existing authorities approved at the last annual general meeting of the Company. Application for Admission is being made to the UK Listing Authority and the London Stock Exchange and it is expected that Admission will become effective and dealings on the London Stock Exchange will commence on 31 January 2006. The Placing Shares are expected to be credited to CREST accounts by 31 January 2006. Current trading and prospectsWith regard to current trading and prospects, KBC confirms its trading statement released on 13 January 2006, and in particular the improvement in trading performance in the second half of 2005 and return to profitability during the last quarter. Consequently, KBC is confident of meeting expectations for a trading loss of around £2 million for the year as a whole, in line with the indication in its first half results statement on 22 September 2005. KBC's final results for the year ended 31 December 2005 are expected to be released on 23 March 2006. Commenting on the acquisition, KBC's Chief Operating Officer, George Bright, said "This acquisition will provide us with an important expansion to KBC's toolkit. Human performance can be a limiting factor in process plant optimisation and our combined offering will generate a service which will meet the needs we see in today's process industries. We are already engaged in three joint refinery projects: the combination works well." TTS's Chief Executive Officer, Jack A. Pankoff, said "We are very pleased to have concluded this agreement. This is a great opportunity for both companies." - ends- For further information please contact: KBC Advanced Technologies plc 01932 236314George Bright, Chief Operating OfficerNicholas Stone, Finance Director Arden Partners Limited 020 7398 1632Richard Day Weber Shandwick Square Mile 020 7067 0700James Chandler/Yvonne Alexander Notes to Editors: About KBC Advanced Technologies plcKBC Advanced Technologies plc, a leading independent oil and energy industry process engineering consultancy, delivers improved operating performance to owners and operators in the oil refining, petrochemical and other process industries worldwide. KBC provides process consulting, strategic planning advice, petroleum and chemical price forecasting, economic studies, and capitalproject services to help clients find the most cost-effective way to achieve their short- and long-term objectives. KBC analyses plant operations and management systems, recommends changes for material and measurable improvements in profitability, and provides implementation services and solutions to assist clients in realising these improvements. In carrying out this work KBC makes extensive use of Petro-SIM, its proprietary refinery-wide simulation and process modelling technology. Formed in 1979, KBC has principal offices in the UK, USA, Singapore, Japan, Russia, and the Netherlands. For more information, visit www.kbcat.com. About Arden PartnersArden Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for KBC and for no one else in connection with the Placing and will not be responsible to anyone other than KBC for providing the protections afforded to its clients or for any other matter referred to in this Announcement. This Announcement includes "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, the expected timing and strategic and financial effects of the Proposed Acquisition, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors which could cause theactual results, performance or achievements of the Company or the markets and economies in which the Company operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The Company cannot give any assurance that the Proposed Acquisition will be completed or that it will be completed on the terms described in this Announcement. This Announcement does not constitute an offer to sell or the solicitation of an offer to buy, acquire or subscribe shares in KBC in the United States, Canada, Australia or Japan or in any other jurisdiction in which such an offer or solicitation is unlawful. The Placing Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offering of securities in any jurisdiction including without limitation the United States. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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