Spice PLC
17 November 2006
17 November 2006
SPICE PLC
ACQUISITION OF APOLLO HEATING LIMITED
AND EXTENSION OF BANKING FACILITIES
Spice plc ("Spice" or the "Group") is pleased to announce the acquisition of
Apollo Heating Limited ("Apollo") for a total initial consideration of £9.65
million, representing a multiple of 8.4 times 2006 operating profit. Apollo will
form the foundations of a new Public Services Division of Spice plc.
Apollo installs, services and maintains gas appliances and heating systems in
domestic and commercial properties owned by social housing bodies and local
authorities. It currently has service and maintenance agreements covering
approximately 70,000 properties, such agreements typically being for periods of
between 3 and 5 years. The range of services provided includes the annual
review of appliances and systems and the production of certificates for
landlords confirming compliance with safety regulations.
The Initial Consideration is subject to adjustment based on the working capital
at completion, though there will be a total cap on the maximum total
consideration of £10.65 million. The initial consideration will be payable in
cash at completion with the adjustment for working capital being paid following
the production and agreement of completion accounts. At the same time, the Group
has extended its banking facilities by £10 million to £70 million.
Apollo has been established for over 10 years and is wholly owned by its
directors. Two of the three current directors of the business will be remaining
with the business following the acquisition and Ken Maclean, the Chairman, will
be retained as a Consultant. Apollo employs approximately 180 people, including
121 CORGI registered gas engineers. Its client base is predominantly based in
the north of England and Wales.
The consolidated audited accounts of Apollo for the year ended 31 August 2006
show turnover of £11.1 million and operating profits of £1.15 million. Net
assets of Apollo at 31 August 2006 were £1.5 million (including cash balances).
The Initial Consideration of £9.65 million payable at completion represents a
multiple of 2006 operating profits of 8.4 times.
Simon Rigby, Chief Executive of Spice, said:
"The acquisition of Apollo gives us access to a specialised part of the social
housing sector. Its activities have similar characteristics to much of the rest
of Spice - multiple tasks carried out for larger clients in a domestic setting.
Like much else we do, this is a business which operates in a regulated
environment where work is driven by statute or regulation and the work force has
a high skill level.
We believe Apollo is an excellent first step into the social housing sector and
we believe there is considerable scope to grow the business further and offer
additional services such as electrical installation and maintenance to Apollo's
client base. Additionally, there will be opportunities to extend Apollo's
activities to enhance the range of services we offer to our existing clients
within our Commercial Services Division."
Shaun Maclean, Managing Director of Apollo, said:
"We believe that becoming part of Spice will enable us to grow in a way that was
not possible as a family business and to offer our clients additional services
which, to date, we have been unable to do. We look forward to working with
Spice to continue to develop Apollo as one of the leading businesses of its
kind."
- Ends -
For further information, please contact:
Spice plc Tel: 0113 384 3838
Simon Rigby, Chief Executive Officer
Oliver Lightowlers, Group Finance Director
Carl Chambers, Corporate Development Director
Financial Dynamics Limited Tel: 020 7831 3113
Billy Clegg
www.spiceplc.com
www.apollo-heating.co.uk
NOTES TO EDITORS
Spice plc
Spice is a support services business operating in the Commercial Services,
Public Services and Utility Services sectors. The Group's operations were
founded in 1996 and have their origins in the electricity industry, though the
range of activities has since been expanded into the water sector, niche
telecommunications services, the public sector energy management and commercial
facilities management. 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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