Acquisition
Dowlis Corporate Solutions plc
04 July 2006
Date: 4 July 2006
On behalf of: Dowlis Corporate Solutions PLC ('Dowlis' or 'the Company')
Embargoed until: 0700hrs
Dowlis Corporate Solutions PLC
• Acquisition
Dowlis Corporate Solutions PLC, the marketing, information and logistics
solutions business, today announces the acquisition of Customer Focus (Software)
Limited ('Customer Focus or 'CF''). Customer Focus is a provider of marketing
driven business software, designed and developed in the UK for SMEs.
Under the terms of the acquisition, Dowlis is undertaking a stepped acquisition,
acquiring 80% of the issued share capital for £160,000 to be satisfied by the
allotment and issue of 344,086 new ordinary shares of 0.4p each in the capital
of Dowlis ('Ordinary Shares'), for which application for admission has been made
and trading is expected to commence on 7 July 2006. The sellers are subject to
a lock in period of 24 months in respect of these Ordinary Shares together with
orderly market arrangements for a further 12 months thereafter. The remaining
20% of the issued share capital of CF is subject to a put option which may be
exercised by the sellers no earlier than the 5th anniversary of the date of
completion and no later than the 10th anniversary of completion. The remaining
consideration payable for the 20% of the issued share capital of CF reflects the
sellers' confidence in Customer Focus's potential under the Dowlis umbrella;
this consideration will be calculated at ten times the average pre-tax profit
attributable to that minority interest in Customer Focus for the two financial
years immediately preceding exercise, subject to a maximum payment of £10
million. This consideration is to be payable in new Dowlis Ordinary Shares or
bank guaranteed loan notes, at the discretion of Dowlis.
As part of the acquisition, Customer Focus has acquired the business and certain
of the assets of Customer Focus (Sheffield) Limited for £138,000 in cash, which
has been provided by way of a loan from Dowlis to CF. Management accounts show
that the current user base of Customer Focus delivered sales to the year ended
30 April 2006 of £675,115 and operating profit for the same period of £34,488.
The value of net assets acquired was negligible.
Customer Focus is to be renamed Industry Software Solutions Limited.
Commenting on the acquisition, Colin Cooke, Chairman, said:
'Our acquisition of Customer Focus is in line with our strategy of delivering
complete business solutions for the Promotional Merchandise and other related
industries. It will also enable Dowlis to enhance significantly its
technological solutions and enable the Group to automate more of its own
processes.'
Andrew Talbot of Customer Focus, added:
'We believe that our potential as part of Dowlis is far greater than as an
independent. We have therefore agreed to be acquired by Dowlis at this stage of
our evolution as we believe that the terms reached are a win/win for both
parties - we retain a significant stake in the upside of our business going
forwards whilst Dowlis benefits from the substantial enhancements that Customer
Focus will deliver in driving its growth.'
- ENDS -
Enquiries:
Dowlis Corporate Solutions plc www.dowlis.com
Martin Varley (Chief Executive) 0870 224 6677
Redleaf Communications
Emma Kane/Sanna Lehtinen 020 7955 1410
Corporate Synergy PLC
Rhodri Cruwys 020 7448 4400
Zeus Capital
Alex Clarkson 0161 831 1512
Notes to Editors:
• Publication quality photographs are available via Redleaf.
• Dowlis has an experienced Board which comprises: Colin Cooke, Chairman, who
has 21 years' experience as a public company director; Martin Varley, Chief
Executive Officer, who has 17 years' experience in the promotional
merchandise industry and has gained an extensive knowledge of the supply
and distribution sectors of the market; Barrett Bedrossian, Finance
Director, formerly finance director of Exley Publications Ltd prior to
which he spent 14 years at a subsidiary of 4imprint PLC; Craig Slater, Non
Executive Director, currently a Director of RTS prior to which he was
finance director and then Chief Operating Officer of 4imprint PLC; and,
Keith Willis, Non Executive Director, who was awarded a lifetime
achievement award from PROMOTA in recognition of his 30 years' contribution
to the industry.
• It is estimated that the annual UK market for promotional merchandise is £1
billion (source: PROMOTA), which comprises approximately 2,000
distributors supported by 600 UK based suppliers of a wide range of
products and services.
• The Group currently has four primary sales channels:
Promotional Products - the Directors believe Dowlis is the second largest
distributor of promotional products in the UK. It sources products from
around the World which are then personalised in accordance with the
client's brand and design guidelines in support of their wider marketing
campaigns.
Trade OnlyTM - suppliers to independent distributors via an annual
catalogue, exhibition and website. Trade OnlyTM receives orders from
approximately 25 per cent of the UK's distributors who access the Trade
OnlyTM range which features 600 products all of which are branded to the
distributors' specification. Trade OnlyTM has entered into a letter of
intent with Technologo to provide Trade OnlyTM and its distributor
customers with the opportunity to show their clients branded products on
screen before they order.
Information Services - a bespoke, industry specific website that contains
detailed information on over 1,000 products including full details of the
supplier and also detailed product information. Revenue is generated from
suppliers wishing to be featured on the website.
Dowlis Communications - a design agency based in Manchester, providing a
range of services which cover all aspects of design and marketing,
including print and brochure production, media planning and buying. It is
expected that Dowlis Communications will provide the platform for a number
of potential additional services that can be added to the Group's offering
as the strategy to focus on marketing services is developed.
The Group's offering is underpinned by its investment in software and
information technology. Its bespoke sales order processing system and
product database was carefully designed to complement the strategy of the
Group. The Directors believe that it will provide the Group with a
competitive advantage over others in the industry.
This information is provided by RNS
The company news service from the London Stock Exchange CQUOVWRNORBRAR