Acquisition
Anite Group PLC
10 January 2002
ANITE GROUP PLC
('Anite' or 'Company')
Anite Acquires Lorien Consulting for up to £4.8 million
INTRODUCTION
Anite, the European consultancy and services company, today announces that it
has, through its wholly owned subsidiary, Anite Public Sector Limited, entered
into a conditional agreement to acquire the business of Lorien Consulting, a
division of Lorien Plc specialising in customer loyalty consultancy,
management consultancy and IT consultancy services across government and
industry for a consideration of up to £4.8 million.
The consideration comprises an initial consideration of £2 million in cash
payable on completion of the transaction and a deferred payment of £2.5
million in cash which is guaranteed by Lloyds TSB Bank Plc. The total
consideration is subject to an adjustment based on the net asset value of
Lorien Consulting at completion, subject to a maximum upwards adjustment of £
300,000.
BACKGROUND TO AND REASONS FOR THE ACQUISITION
Anite Group provides a portfolio of services from IT consultancy and
applications software to systems integration and managed services to four
principal markets: telecoms, travel, public sector and finance. Anite Public
Sector, which is acquiring Lorien Consulting, offers services to local and
central government covering social services, revenue, benefits, housing
applications and criminal justice, principally in the UK.
Anite continues to build its position in the local authorities' market, with
72% penetration, based on a range of applications and increasing customer
base. Anite's public sector business is also well placed to benefit from the
government's initiatives for 'joined-up' local and central government and
e-government, which include budgeted spending, by 2005, of £2bn on
e-government solutions to local authorities. Following its establishment as a
fully integrated and homogenous business during the last financial year, the
business has grown its sales from £7m two years ago to £38m last year,
generating operating profits before tax of £2.2m. For the six months to 30th
October 2001, compared to the same period last year, sales were up 76% to £
23.7m, with operating profits before goodwill, amortisation and interest 765%
higher at £2.2m. At 30th October 2001, order books totalled £29m.
Lorien Consulting provides customer loyalty consultancy, management
consultancy and IT consultancy services to public sector organisations
including government departments and local and regional authorities,
businesses in the telecommunications, utilities and transport sectors as well
as a number of private sector clients. It employs over 70 people, principally
based in Chertsey in Surrey.
The acquired business will continue to be led by George Kalorkoti, its current
Managing Director, and will provide the nucleus for an expanded consultancy
and systems integration operation, building on the solutions capability
already provided by Anite to its central government clients. Following
improved profitability in 2001, Lorien Consulting is expected to contribute
towards Anite Public Sector's performance in the financial year ended 30th
April 2003 by enhancing its market offering and overall capabilities
structure.
STRUCTURE
As at 26 November 2000 (being the last date to which annual accounts for
Lorien Plc have been prepared) the value of the net assets the subject of the
transaction was £1.525m with profits attributable to those net assets for such
12 month period of £306,000 on turnover of £7.906m.
The Lorien Consulting business is carried on by Lorien Plc through three
wholly owned subsidiaries, Business Process Improvements Limited ('BPI'),
Chatsfield Technologies Limited ('Chatsfield') and P-E International Plc
('P-E'). The transaction involves the acquisition of the assets of P-E and
the entire issued share capital of Chatsfield and BPI.
The apportionment of the consideration between the asset purchase agreement
and the share purchase agreement is as follows:
(i) In respect of the acquisition of the assets from P-E, £550,000 in
cash will be paid on completion and £2,500,000 in cash will be paid 12 months
following completion.
(ii) In respect of the acquisition of the issued share capital
of each of BPI and Chatsfield, £1,450,000 in cash will be paid on completion.
(iii) The total consideration payable will be adjusted and may be
increased or decreased based on a net asset valuation 7 months following
completion, subject to a cap of £300,000 being payable by Anite in excess of the
£4.5 million consideration.
The transaction is conditional upon Lorien Plc obtaining shareholder consent.
Lorien Plc has given notice to its shareholders that an extraordinary meeting
of its shareholders will take place in respect of the approval of this
transaction on 11 February 2002 and completion is expected to take place
immediately thereafter.
Anite's Chief Executive John Hawkins, commenting on the acquisition, said:
'Through the acquisition of Lorien Consulting we will significantly strengthen
our strategic consultancy capability in the Public Sector market. The
innovative customer programmes provided by Lorien will be offered across the
Anite Group customer base and provide improved customer retention and loyalty
for our clients customers.'
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For further information please contact: www.anite.com
Anite Group Plc 0118 945 0121
John Hawkins, Chief Executive
Simon Hunt, Finance Director
Weber Shandwick Square Mile
Reg Hoare/Laurence Read