The Vitec Group PLC
09 May 2005
FOR IMMEDIATE RELEASE
The Vitec Group plc
9 May 2005
The Vitec Group plc
Acquisition of Kata
Introduction
The Vitec Group plc ('Vitec' or the 'Group') announces that it has signed an
agreement to acquire the business and assets of Kata International Limited and
Kata Professional (Kimchi & Tishler) Limited ('Kata'), the designer and
manufacturer of premium protective carrying bags for cameras and accessories in
the photographic and broadcast markets, for an initial cash consideration of
US$8.0 million (£4.2 million) and deferred consideration of up to US$13 million
(£6.9 million) conditional upon future sales and profitability targets (the '
Acquisition').
The Board of Vitec believes that the Acquisition will add a profitable photo and
video accessory company with a high quality brand image to the Group. Bogen
Imaging, the distribution arm of the Group's Photographic Division, already
sells Kata's bags and the Group has built a sound understanding of Kata and its
successful management team in recent years. Kata also supplies a range of bags
for Manfrotto's tripods. Following the Acquisition, Kata will be integrated into
the Group's Photographic Division.
The Acquisition will be funded from existing resources and is expected to be
immediately earnings enhancing (see note 1).
Commenting on the Acquisition, Gareth Rhys Williams, Chief Executive of Vitec,
said:
'The Board feels that the manufacture of video and photographic bags will
enhance the range of accessories that we already produce. With the additional
benefits of distribution to third party dealers through Bogen Imaging, the
acquisition has the potential to generate attractive returns for the Group's
shareholders. We look forward to working with Kata even more closely in the
future.'
Information on Kata
Kata designs, develops, manufactures and markets high quality products which
integrate smart protection solutions with innovative carrying systems. Kata's
line of products includes cases for cameras and accessories in the photographic
and broadcast markets as well as backpacks and vests for personal protection.
In the year ended 31 December 2004 Kata generated profit before tax of US$1.1
million (£0.6 million). Net assets as at 31 December 2004 were US$1.1 million
(£0.6 million).
Kata is based in Jerusalem, Israel. For more information, see www.kata-bags.com
Summary terms of the Acquisition
Under the terms of the acquisition agreement, Vitec is acquiring the business
and assets and assuming certain liabilities of Kata for an initial net cash
consideration of US$8.0 million (£4.2 million) payable upon completion, which is
expected to take place by 31 May 2005.
Deferred consideration of up to a maximum of US$13.0 million (£6.9 million) is
also payable on the achievement of certain annual sales and profitability
targets for 2005 - 07. The maximum deferred consideration will only become
payable if turnover and profit before interest and tax in the year ending 31
December 2007 exceed US$20.4 million (£10.8 million) and US$4.6 million (£2.4
million) respectively.
-Ends-
Contacts:
The Vitec Group plc Telephone: 020 8939 4650
Gareth Rhys Williams
Alastair Hewgill
Financial Dynamics Telephone: 020 7269 7291
Rob Gurner
Richard Mountain
Notes to Editors
About The Vitec Group plc
The Vitec Group plc supplies a wide range of equipment and services to the
broadcasting, entertainment and photographic industries. Its products are
distributed in nearly 100 countries, either through dealerships or direct to the
end user or corporate sector, and it has manufacturing facilities in four
countries. The Vitec Group is a major force in its chosen specialised fields.
More information can be found at: http://www.vitecgroup.com.
Note 1
This statement should not be taken to mean that earnings per share of The Vitec
Group plc will necessarily exceeded historic earnings per share of The Vitec
Group plc and no forecast is intended or implied.
Note 2
All values in pounds sterling have been calculated using the exchange rate: £ 1:
1.89 US$
This information is provided by RNS
The company news service from the London Stock Exchange
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