Tribal Group PLC
21 August 2001
Tribal Group plc ('Tribal Group' or the 'Company')
Acquisition of GWT Group Limited (the 'GWT Group')
Tribal Group is pleased to announce the acquisition of the GWT Group. The
Company has acquired 85 per cent. of the issued share capital of the GWT
Group, with the balance of 15 per cent. being retained by the GWT Group
management.
Since its inception in 1998 the GWT Group has grown rapidly to become a
leading supplier of consultancy services to the local government sector. It
currently operates in three principal areas: recruitment advertising and
communication services; search and selection services for senior management
appointments; and employment consultancy services. In the past twelve months,
the GWT Group has worked with over 100 local authorities. 75% of the GWT
Group's revenue is secured on long-term contracts.
In the year ended 31 July 2000, the GWT Group achieved an operating profit of
£360,000 on turnover of £1,386,000. The net assets were £112,000 as at 31
July 2000. On the basis of the audited accounts for the 11 months ended 30
June 2001 and the management accounts for July 2001, the GWT Group achieved an
operating profit of £870,000 on turnover of £3,330,000 for the year ended 31
July 2001.
The initial consideration of £4,894,146 is to be satisfied by:
- the issue of 138,820 ordinary shares of 5p each in Tribal Group ('New
Tribal Group Shares')
- £4,154,196 in bank guaranteed loan notes; and
- £339,950 in cash.
The initial consideration includes the acquisition of cash balances held by
the GWT Group of £168,112. Further consideration will be paid based on the
audited accounts of the GWT Group for the year ended 31 July 2001: for every
£1 by which the audited operating profit exceeds £820,000, Tribal Group will
pay £5.60. Any such deferred consideration will be satisfied by the issue of
further loan notes.
Application has been made for admission of the New Tribal Group Shares to
trading on the Alternative Investment Market of the London Stock Exchange
('AIM'). It is expected that the New Tribal Group Shares will commence
trading on AIM on 22 August 2001. The New Tribal Group Shares will rank pari
passu in all respects with the existing ordinary shares of the Company.
Commenting on the announcement, Henry Pitman, Chief Executive of Tribal Group,
said:
'GWT Group has an impressive trading history, and an excellent public sector
customer base, and we are delighted that they are joining Tribal Group. This
acquisition further strengthens our position in the Local Authority sector and
enhances our human resource and communication capacity. We anticipate further
acceleration of its growth as a result of its joining Tribal Group. There are
significant opportunities for the expansion of its services into the health
sector and central government and into related areas such as interim
management and human resource outsourcing.
For further information contact:
Henry Pitman, Chief Executive - Tribal Group plc - 01386 702 900
END
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