Acquisition
NCC Group PLC
22 January 2008
22 January 2008
NCC Group plc
Acquisition of European Escrow provider for up to €10.5m substantially increases
international presence
NCC Group plc (LSE: NCC, 'NCC Group' or 'the Group'), the international,
independent provider of Escrow Solutions, Assurance Testing and Consultancy, has
acquired Escrow Europe Holdings B.V. ('Escrow Europe'), a pan-European escrow
solutions company, for a maximum consideration of up to €10.5m in cash.
This earnings enhancing acquisition will increase the Group's share of the
European escrow market and substantially develops its international presence.
The Group also reported its interims results for the six months to 30 November
2007. Overall Group revenue grew by 42% to £16.4m (£11.5m in 2006) and
adjusted operating profits by 41% to £4.7m (£3.3m in 2006). Adjusted fully
diluted earnings per share improved 44% to 9.8p (6.8p in 2006) and the Board has
approved the payment of an interim dividend of 2.25p, up by 50%.
Escrow Europe provides independent escrow solutions and escrow verification
testing services to approximately 10,000 clients, predominately located in
Europe, through 1,000 escrow agreements.
The initial consideration on completion is €7.5m, with a further performance
related payment of up to €3.0m. The latter is expected to be paid in two parts
at the end of March and June 2008.
For the year ended 31 December 2007, Escrow Europe's accounts are expected to
show, before application of NCC Group accounting policies including deferred
income, revenue of over €2.3m, earnings before interest and tax of €0.8m,
including in the region of €1.0m of annual recurring revenues and net assets of
not less than €623,000.
On 31 December 2007, Escrow Europe, with NCC Group's approval, acquired the
escrow contracts of Getronics PinkRoccade, a Netherlands IT services provider,
providing further annual recurring revenues of approximately €300,000.
NCC Group expects that the business should contribute over €1.0m of profits on
revenues of €2.5m in its first 12 months of NCC Group ownership.
Escrow Europe, which was established in 1989, is based in Amsterdam,
Netherlands, with a subsidiary in Munich, Germany, and franchised sales
operations in Switzerland, Belgium, Sweden, South Africa and Israel. It
currently employs 10 people and has a client base across all sectors of the
market including Delta Lloyd Group, a major financial services provider in the
Netherlands and Logica CMG.
The operation will be managed within NCC Group's Escrow Solutions division. It
will provide increased potential for developing existing European accounts and
offer clients an improved account management service in their native languages.
The policy of maintaining a neutral stance favouring neither licensees nor
suppliers and providing mandatory testing of escrow deposits complements the
Group's independent status and position as a 'trusted advisor' to its clients.
The company will trade as 'Escrow Europe, an NCC Group Company.'
The Escrow Europe operational management team is staying with the business. The
Group expects to benefit from their knowledge and experience of the European
escrow market.
Rob Cotton, NCC Group Chief Executive, said:
'This exciting earnings enhancing acquisition is an important step in
strengthening our international position as the world's largest escrow provider
and increases both the number of businesses and software applications protected
by one of our escrow solutions.
'Research shows that, whilst 97% of organisations depend on business-critical
software applications, only 18% protect all of these with escrow solutions. NCC
Group is well placed to inform and educate clients on the risks and increase
their level of IT assurance by protecting more applications with comprehensive
escrow solutions. '
Enquiries:
NCC Group (www.nccgroup.com) Today 020 7457 2020
Rob Cotton, Chief Executive Thereafter 0161 209 5432/5200
Paul Edwards, Group Finance Director
College Hill
Adrian Duffield/Rozi Morris 020 7457 2815/2803
This information is provided by RNS
The company news service from the London Stock Exchange