Acquisition

RNS Number : 5301V

Spice PLC

13 July 2009

 



13 July 2009 

Spice plc

Acquisition of ComGroup Australia Pty Limited

Spice plc ("Spice" or "the Group"), the provider of Total Utility Support Services, is pleased to announce that its Distribution Division has completed the acquisition of ComGroup Australia Pty Limited ("ComGroup"). 

Spice established its Telecoms business with the purchase of Simoco in 2002. At the same time, Simoco's sister business was purchased by ComGroup. Since then Simoco and ComGroup have worked jointly on major projects and operated an R&D joint venture. The acquisition re-unites two businesses that share fifty years of heritage, common technology platforms and a global product brand. Following the acquisition, ComGroup will be re-integrated into the existing Telecoms operations of the Group's Distribution Division.

ComGroup, designs and distributes Simoco branded mobile radio handsets and systems to utilities and government. The re-uniting of Simoco and ComGroup is a natural drawing together of two businesses with complementary technologies and operating in complementary markets. The combination of ComGroup and Simoco will create strong operational synergies. 

Increasingly, we are being asked by our utility customers to provide "cradle to grave" technical solutions. Our Distribution Division will now be able to offer customers complete systems that automate their networks both in operations and data collection. We will be able to provide solutions that allow network owners to have information to make informed decision on network performance and to deliver self healing networks that restore services within seconds and automatically isolate faults.

ComGroup's target markets in Australia, North America and South East Asia, complement our existing operations in UK, Europe, China and Latin America. ComGroup is located in Melbourne, Australia and Andover, UK and employs 101 people.

The acquisition of ComGroup is for initial cash consideration of £6.9 million (AUS$14 million) on a cash free debt free basis. The price represents a multiple of 3.1 times the audited operating profit of the business for the year ended June 2008. The consideration is subject to adjustment based on the working capital at completion following the production and agreement of completion accounts. There will be a cap on the maximum total consideration payable, of £8.8 million (AUS $18 million), however the total consideration is not anticipated to be significantly different to the initial consideration of £6.9 million. 

The audited financial statements of ComGroup for the year ended June 2008 show revenue of approximately £15.0 million and operating profits of approximately £2.2 million. Gross assets at 30 June 2008 were approximately £8.2 million. Net assets at completion are expected to be approximately £6.1 million. 

Simon Rigby, Chief Executive Officer, commented: 

"Spice has taken the opportunity, on favourable terms of net assets plus £0.8 million which enhance earnings, to reunite these two businesses as a result of the strong demand for ComGroup's products within our utility client base. In so doing, we have once again globalised Simoco's brand. The acquisition strengthens our capability to manage complex distributed systems where flexible telecoms solutions are essential to our client's network operations." 

Ends

Enquiries:

Spice plc	Tel: [phone]
Simon Rigby, Chief Executive Officer Oliver Lightowlers, Group Finance Director
Financial Dynamics	Tel: [phone]
Billy Clegg Caroline Stewart
KBC Peel Hunt (Broker)	Tel: [phone]
Julian Blunt (Corporate finance) Matthew Tyler (Corporate broking)

NOTES TO EDITORS

Spice plc

Spice is a total utility infrastructure support services business. The Group's operations were founded in 1996 and have their origins in the electricity industry, although the range of activities has since been expanded into other niche areas. The Group is organised into two divisions to match its utility customer base; a Supply Division; and a Distribution Division.  Spice's businesses have a common theme of delivering and co-ordinating infrastructure services to customers, and the technological element within the product mix has been built up significantly over the course of the last three years.

 

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