Acquisition & Notice of GM

RNS Number : 9745U

Pentagon Protection PLC

26 October 2010

 



Pentagon Protection Plc

('Pentagon' or 'the Group')

ACQUISTION OF INTERNATIONAL GLASS SOLUTIONS LLC

 NOTICE OF GM

Pentagon Protection Plc (AIM: PPR) is pleased to announce the acquisition, subject to shareholder approval, of 100% of the share capital of International Glass Solutions LLC ("IGS") ("the Acquisition"), from Haytham ElZayn, ("the Seller") Pentagon's Chairman.

IGS, which is based in the USA, is managed by Patric Fransko, one of Pentagon's non-executive directors. It provides film based glazing solutions covering a wide range of applications, from blast mitigation to improving energy efficiency. IGS has built a number of strategic partnerships and the Acquisition will further develop Pentagon's market penetration, giving it a strong foothold in the USA. As a result of the Acquisition, Patric will adopt an executive role within Pentagon, adding significant experience to, and strengthening, the management team. Patric is to become the Group CEO with specific responsibility for developing the business in the USA.

The consideration payable for IGS will be satisfied by the issue of shares in the Group and is linked to the sustained profitability of the acquired business. The valuation is based on five times the average annualised profits of the acquired business over the two years following the Acquisition and the consideration is capped at £1,000,000.

Of this sum, £200,000 is payable to the Seller on completion, such sum to be satisfied by the issue of 80 million shares at an issue price per share of 0.25 pence, representing a significant premium over both the current price of Pentagon's shares and the price per share in the recent capital fundraising round of 0.2 pence. The remainder of the consideration payable for the Acquisition is to be determined based on annualised profit multiples of IGS during the period ending 24 months after completion of the Acquisition, and is to be satisfied again by the issue of shares to the Seller. If the issue of shares to the Seller in satisfaction of the deferred consideration would cause the Seller to hold more than 29.9 per cent of the entire issued share capital of the Group, the balance of the outstanding consideration will be paid in cash.

The Acquisition is conditional on the shareholders' approval and full details of the acquisition and the consideration are included in the circular being posted to shareholders on 27 October 2010. A General Meeting of the Group will be held at the offices of Nabarro LLP at Lacon House, 84 Theobald's Road, London, WC1X 8RW at 11a.m. on 12 November 2010.

Pentagon have also concluded an executive search project and are pleased to announce that they have recruited a new COO, Steve Chambers. Steve is a graduate of Annapolis Naval Academy and has many years experience selling products similar to Pentagon's range. Steve will be reporting to Patric as Group CEO.

In order to drive the expansion and facilitate the Group's growth, Haytham ElZayn is making a working capital facility of £250,000 available to Pentagon ("the Loan"). The Loan is secured by way of a debenture over the assets of SDS, a wholly owned subsidiary of the Group, and a fixed charge over all the shares held by the Company in SDS.  Full details of the Loan are also included in the circular being posted to shareholders.

The Seller is a Director and substantial shareholder of the Group and as such the Acquisition and the Loan each constitute a related party transaction under the AIM Rules. The Acquisition also constitutes a substantial property transaction requiring the approval of shareholders under section 190 of the Companies Act. In accordance with AIM Rule 13, the Independent Directors, having consulted with Seymour Pierce, the Company's nominated adviser, considers the terms of the Acquisition and the Loan to be fair and reasonable insofar as Shareholders are concerned.

Commenting on the Acquisition and appointment of Steve Chambers, Steve Harrhy, main Board Director, said "This is a really exciting time for us, the acquisition of IGS not only opens up the US market but also allows us to benefit more fully from all of Patric's experience. The addition of Steve Chambers to our team will give us greater direction and with his military knowledge he will be able to further develop our product range and market penetration. This, coupled with Haytham's demonstration of his continuing support, should provide us with a strong platform for growth."

Enquiries:

Pentagon Protection                                                   Tel: [phone]

Haytham ElZayn

Pentagon Protection                                                   Tel: [phone]

David Marks

Seymour Pierce                                                           Tel: [phone]

Jonathan Wright

Rivington Street                                                         Tel: [phone]

Jon Levinson

Notes to Editors:

Admitted to AIM in March 2003 Pentagon Protection plc is a global specialist in the development and application of glass protection window film to provide a cost-effective and immediate solution to many problems normally associated with building flat glass.

As experts in enhanced security and blast mitigation, in September 2008 Pentagon acquired SDS Group Limited, an established company of over 30 years and a leading supplier of security equipment and products. SDS is also a world leader in security consulting and training, these services being led by Dr John Wyatt. John is highly respected in his field and also widely known both in the UK and overseas; his knowledge and reputation are substantial assets to the wider Group.

SDS Group supplies equipment, including highly-specialist security and search equipment, mainly to governments, police forces and security and defence forces in the UK and around the world. SDS has strong relationships with customers and extends their offering to clients by providing expert knowledge and further training and consultancy. This acquisition supports plans for continued expansion of the Group's activities in the security industry which is affected less by the world economic downturn than many sectors.

 

END

 

 

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