GBP14million acquisition
Sanderson Group PLC
14 September 2007
For immediate release 14 September 2007
Sanderson Group plc: £14 million acquisition
Purchase of Retail Business Solutions Group Limited
- largest acquisition since flotation
Sanderson Group plc ('Sanderson', 'Group'), an established provider of
market-specific software and IT services to the UK multi-channel retail and
commercial sectors, today announces the acquisition of Retail Business Solutions
Group Limited ('RBS', 'Company'), for up to £14 million in cash and shares.
The total initial consideration for the acquisition is £12.275 million in cash,
of which £9.225 million will be funded by way of additional bank borrowing.
Senior RBS management who are all continuing with the business have elected to
take 468,262 new Ordinary Sanderson shares (the 'Consideration Shares') as part
of their consideration. The Consideration Shares are valued at £225,000 based on
the average closing mid-market price of 48.05 pence over the ten business days
preceding 13 September 2007. Application will be made to the London Stock
Exchange for the Consideration Shares to be admitted to AIM.
Based in Milton Keynes, RBS was formed in 1988 and is a well established
provider of solutions to the retail sector. The Company markets and supports
solutions which provide front and back office electronic point-of-sale systems
including the highly successful Retail-J software together with a full range of
IT services. RBS employs 74 people and has approximately 200 customers
throughout the UK and Ireland, including Blacks Leisure, Harrods and French
Connection. Mr Richard Goodall has led the Company since 2000 and following the
acquisition will continue as Managing Director of the business within Sanderson.
For the twelve months ended 31 March 2007, RBS achieved revenues of £11.98
million and profit before interest and tax of £1.34 million. Gross assets were
£8.73 million at 31 March 2007 and at completion the Company had cash balances
of £3.5 million. Sanderson expects the acquisition to be earnings enhancing in
the first full year*.
Further consideration up to a maximum of £1.5 million in cash may be payable
dependent upon the achievement by RBS of certain performance targets for a
period ending not later than 30 September 2008. The senior management of RBS
will receive options on 600,000 shares which, subject to performance criteria
being met, will be exercisable from 1 October
2010.
The acquisition of RBS significantly enhances the Group's market position and
the multi-channel retail customer base will increase to over 600 clients. The
enlarged Sanderson product and services portfolio will provide good
opportunities for cross-selling, and the managed service capability within RBS
provides an exciting opportunity to further develop the Group. The success of
RBS in gaining new clients, with recent additions including Slater Menswear
and Wyevale Garden Centres, is expected to add further momentum.
Commenting on the acquisition, Christopher Winn, Executive Chairman of
Sanderson, said:
'We are delighted to welcome Richard Goodall and his team into the Sanderson
Group.
This is the latest in a series of investments in our multi-channel retail
division which will now account for approximately 80 per cent of the Group's
revenues. We have made good progress in this active sector and the acquisition
of RBS will expand our product portfolio, increase our customer base and provide
trading synergies within the Group. We are confident that RBS will make a
significant contribution to Sanderson in the future, providing new revenue
streams and greater market opportunities.
The Group is currently trading well in the second half of the year to 30
September 2007 and expects the results for the year to be in line with market
expectations'.
Enquiries:
Sanderson - Christopher Winn, Chairman 02476 555466
Sanderson - Adrian Frost, Finance Director 02476 555466
Sanderson - David O'Byrne, Managing Director 01709 787787
Arden Partners - Graeme Cull 0121 423 8960
Winningtons Financial - Paul Vann 07768 807631
*The statement regarding earnings enhancement should not be interpreted to mean
that earnings per share will necessarily be greater than those for the relevant
preceding financial period.
Note to Editors:
Sanderson Group plc floated on AIM in December 2004 at an issue price of 50p.
The Group was established in 1983 and owns substantial software IPR which it
develops and supplies as market-specific solutions to the multi-channel retail
and commercial markets. The Group has a substantial recurring revenue stream
from pre-contracted licence, support and maintenance agreements which
facilitates its progressive dividend policy.
Since flotation the Group has made four acquisitions, including RBS:
* July 2005 - Progressive Computer Systems Limited, a provider of browser-based
software solutions to retail and commercial organisations in the UK.
* February 2006 - Megabyte Limited, now Sanderson Retail Systems Limited, an
established owner/supplier of software for front and back office electronic
point of sale systems and IT services to the retail market.
* February 2007 - the trade and IPR of Elucid, a business within the K3 Group
plc, which owns, develops and markets software for use in the mail order and
e-commerce sectors of the multi-channel retail market.
Not for release, distribution or publication into the United States, Canada,
Australia, Japan and the Republic of Ireland.
This information is provided by RNS
The company news service from the London Stock Exchange