Disposal of Sira Defence and Security Limited

RNS Number : 0476A

Volvere PLC

23 May 2019

 

23 May 2019

Volvere plc

("Volvere" or the "Company")

Disposal of Sira Defence and Security Limited

Volvere (AIM: VLE), the growth and turnaround investment company, is pleased to announce the disposal today of Sira Defence and Security Limited ("Sira"), its digital CCTV viewing software business, to Nice Systems UK Limited ("NICE"), a subsidiary of Nice Limited, a global enterprise software solutions provider, listed on the Tel Aviv Stock Exchange (TLV: NICE) and NASDAQ (NASDAQ: NICE), (the "Disposal").

The total consideration, which is payable in cash, is expected to be approximately £3.0 million, subject to an adjustment based on the level of working capital at the time of completion.

As is customary in such transactions, a proportion of the consideration (£0.24 million) will be held in an escrow account for 18 months post-completion.

Volvere owns 100% of the ordinary shares in Sira and is disposing of its entire stake in the company. Volvere is expected to retain approximately £2.55 million of the total consideration after taking into account transaction costs, incentive payments and bonuses payable to staff and management relating to the performance of Volvere.  Approximately £0.32 million of the bonuses referred to above will be paid to the executive directors, and is considered to be a related party transaction pursuant to Rule 13 of the AIM Rules.  David Buchler, the sole independent director and Chairman of the Remuneration Committee, considers, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, that the terms and amounts of the payments are fair and reasonable insofar as the Company's shareholders are concerned.

Background to and reason for the Disposal

Sira has developed what we believe to be unique intellectual property, albeit in a niche market area.  The Board believes that the acquisition by NICE will provide opportunities for Sira's technology to be offered through NICE's international network and therefore to provide enhanced opportunities for the company and its staff than would be achievable operating independently within Volvere.

Volvere acquired Sira in 2006 for a consideration of approximately £0.005 million and has made follow-on working capital loans. During its period of ownership within the Volvere group ("Group"), Sira has repaid all Group debt, and paid dividends and management charges totalling £0.38 million to the Group.

Financial information and use of proceeds

Sira's revenues for the year ended 31 December 2018 were £0.3 million (2017: £0.28 million).  Profit before tax and intra-group management and interest charges was £0.06 million (2017: £0.05 million).  Profit before tax for the year was breakeven (2017: £0.04 million) - with the difference being intra-group interest and management charges.

Following the Disposal, the Group will continue to focus on the growth and development of the Group's remaining subsidiary, Shire Foods Limited, the Group's 80% owned food manufacturing business, as well as other opportunities as they arise. The net proceeds from the Disposal will be added to the Group's cash reserves for use in pursuit of Volvere's continuing investing policy, which is to invest in or acquire growth or turnaround stage companies.

Commenting on the Disposal, Jonathan Lander said: "We have been delighted with the success of Sira since we acquired it in 2006 and the Disposal provides an excellent return for shareholders. We are grateful for the hard work and commitment of the staff at the company over a long period. Although we are sad to see the Sira team leave the Group, we wish them all a successful future within NICE."

This announcement is inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information contact:

Volvere plc
Jonathan Lander, CEO	Tel: + 44 (0) 20 7634 9707
	www.volvere.co.uk
Cairn Financial Advisers LLP Sandy Jamieson/James Lewis	Tel: + 44 (0) 20 7213 0880
Hobart Capital Markets LLP Lee Richardson	Tel: + 44 (0) 20 7070 5691

 

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