Reliance Security Group PLC
13 September 2000
RELIANCE SECURITY GROUP PLC
The Directors of Reliance Security Group plc ('Reliance') are pleased to
announce their intention to proceed with an investment of approximately
$6m in Command Security Corporation Inc ('Command'), a Nasdaq listed
company, incorporated in the USA.
In an off-market transaction, Reliance is to acquire 23% of the ordinary
shares at $2.20 per share, equivalent to 27c per $ turnover, together
with convertible preference shares and existing options which, when
fully converted, amount to approximately 37.3% of the total outstanding
share capital. Reliance will also be granted warrants to purchase new
shares at $1.25 per share amounting to 20% of the issued and outstanding
share capital, at any time between 1 and 5 years from the date of the
transaction. Reliance are entitled to nominate three directors to the
Command board and, subject to appropriate immigration approval, Graeme
Halder, formerly Finance Director of Reliance Security Services Limited,
will be appointed Chief Finance Officer.
The transaction, which is at a 250% premium to the market, has been
approved by the Command board, is subject to stockholder approval and is
conditional upon the dismissal of a derivative law suit brought against
Command in 1997 which has had a potential impact on Command's recent
market valuation and financial performance. The consideration, payable
out of cash balances, is due on completion of the transaction, expected
in December 2000.
Command, with current annualised turnover of c.$70m, provides manpower
security to the commercial and government sectors throughout the United
States and has particular strengths in aviation. This investment affords
Reliance and Command the opportunity to provide services to their
respective customers across a wider geographic area. It provides
tentative steps for both businesses to address the issues of potential
globalisation of their markets. It represents for Reliance a measured
response to the great opportunities and risks of the USA market.
Founded in 1980 by its present Chairman, Bill Vassell, Command had, in
the fiscal year ended 31 March 2000, an EBITDA of $2.1m or $0.32 per
share, a Loss before tax of $0.3m and net assets of $2.2m. In the first
quarter to June 2000, turnover increased 20% year on year and PBT was
$70k.
Reliance Chairman, Brian Kingham, said: 'This is our first investment
outside the UK and provides an involvement in the world's largest and
fastest growing market for security and support services. We have known
Command for more than 10 years. They enjoy a strong market position, a
well-established executive management team and adequate resources.
Command are determined to grow beyond their current ranking of 15th in
size, based on turnover, in the still highly fragmented USA market.
They have everything to go for and I believe the Reliance experience of
having grown successfully in similar circumstances will be helpful. The
investment provides Reliance with a window on developments in the USA
which represents almost half the world market for security.'
For further information contact:
Geoff Haslehurst - 01895 205000
Brian Kingham - 0207 730 9716
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.