Acquisition of SDS Group

RNS Number : 2465D

Pentagon Protection PLC

11 September 2008

 

RNS Release

 

11 September 2008

 

Pentagon Protection Plc (“Pentagon” or “the Group”) (AIM: PPR), the global specialist in the supply and installation of enhanced glass protection, has acquired SDS Group Limited, an international security company based in Kent who are leaders in high risk security consulting, training and the supply of a comprehensive range of security equipment and products.

 

Established in 1975, SDS Group provides bespoke security consultancy inhigh-risk project management and technical skills in structural building and materials analysis. In addition, it suppliesspecialist security training and hardware to large organisations including the United Nations, the Ministry of Defence and the Metropolitan Police. Its Chairman and Technical Directoris Dr John Wyatt MBE, a well-known and highly-respected security and bomb blast expert who will remain with the business, as will all his staff.

 

In the last audited report and accounts for the financial year ended 30 April 2008, SDS Group reported pre-tax profits of £86,911. Net assets were £190,506, including £54,300 of cash.

 

Pentagon will pay an initial consideration of £400,000 in cash and 40 million new ordinary Pentagon shares issued at 0.27p per share.In addition, the vendors will receive a deferred consideration upon SDS meeting a certain level of profit as reported in the audited accounts. The deferred element will be payable in three instalments over the next three years with each payment being decided following Pentagon’s year end. Each payment will be calculated at 65% of the profits of SDS in excess of £200,000 following the acquisition, and the first payment will be made to a maximum of 14 days after the publication of SDS’s report and accounts for year ended 30 September 2009. 

 Fifty percent of the consideration will be paid in Pentagon ordinary shares (the price based on the closing mid-price on the day before the date of issue) and the balance in cash. The maximum deferred consideration will not exceed £400,000.In June 2008, the Group raised £445,000 towards the acquisition of this profitable, UK business that can provide complementary services and enhance Group earnings globally.

 

SDS directors will be subject to a lock-in agreement, which prohibits the vendors from selling the shares for 12 months from completion, and thereafter, subjects them to an orderly market arrangement for the following 12 months.

 

Pentagon plans to continue its expansion strategy via additional acquisitions and further organic growth.

 

The 40 million new Pentagon ordinary shares of 0.1p each to be issued as part consideration for the acquisition will rank pari passu with existing ordinary shares. Application for the new ordinary shares to be listed on AIM has been made and admission is expected to take place on 15 September 2008. Following admission, Pentagon will have 531,418,156 ordinary shares in issue.

 

Alan Nicholl, CEO of Pentagon, comments:

 

“We know Dr John Wyattvery well, and we respect the strength of his professional reputation here in the UK and internationally. Naturally we are delighted that he and his colleagues have decided to join forces with Pentagon in order that we can both grow our businesses more quickly and work on a wider portfolio of security based contracts.”

 

Enquiries: 

 

Pentagon Protection Plc                                                           01494 793 333 
Alan Nicholl, Chief Executive Officer

 

Dowgate Capital Stockbrokers                                               020 7492 4799 
Philip Dumas

 

Seymour Pierce                                                                           020 7107 8000 
Jonathan Wright/Matt Thomas 

 

Bishopsgate Communications Ltd                                        020 7562 3350 
Neil Boom/Hannah Wrathall

 

 

END

 

 

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