Acquisition

Northgate PLC 17 July 2002 Northgate plc 17July 2002 Northgate plc ('Northgate' or the 'Group') Acquisition of Furgonetas de Alquiler SA ('Fualsa') Introduction Northgate, the UK's leading specialist in light commercial vehicle hire, announces that it has agreed to make an initial investment by purchasing 40% of the equity of Fualsa, one of the largest van rental companies in Spain, for a cash consideration of €15.4 million (£9.8 million). In addition, the Group has options to acquire the remaining 60% by 31 May 2006. Provided that earnings targets are met, the maximum amount payable by the Group would be a cash consideration of €52.6 million (£33.6 million) for 100% of Fualsa. This represents Northgate's first acquisition in continental Europe and is consistent with the Group's stated strategy of seeking to build a significant rental business outside of its domestic market place. The Group will fund the acquisition from existing resources. Financial Effect of the Acquisition The Directors of Northgate anticipate that the acquisition will be earnings enhancing both pre- and post- amortisation of goodwill in the first full financial year following the initial investment. Information on Fualsa Founded in 1981, Fualsa, one of the largest van rental companies in Spain, is currently wholly owned by members of the Acebes family. Fualsa had sales in the twelve-month period ended 31 December 2001 of €37.9 million (£24.2 million) and profits before tax of €4.7 million (£3.0 million). Net assets as at 31 December 2001 were €17.8 million (£11.4 million). Fualsa rents light commercial vehicles and cars using 'Renting Abierto' (Open Renting), non-contractual long-term hire arrangements similar to Northgate's ' Norflex' product, principally to customers in the construction industry. Its current fleet size stands at around 10,000 vehicles, of which approximately 6,200 are vans. Fualsa operates from headquarters in Madrid and further locations in Barcelona, Seville, Valladolid, Valencia and Zaragoza. Reasons for the Acquisition As mentioned in its results for the year ending 30 April 2002, the Group has been looking to expand into continental Europe for some time. The market for vehicle rental in continental Europe is characterised by lower penetration rates than in the UK and is highly fragmented. In addition, the Spanish market is one of the fastest growing in Europe. The Directors of Northgate believe that the Spanish market has many of the dynamics of the UK market some eight years ago. During that time, Northgate has more than quadrupled its fleet and become the UK market leader. The acquisition will provide Northgate with an ideal entry point into the Spanish market, providing immediate scale, local management and potential for significant growth. Terms of the Acquisition Northgate will acquire Fualsa for a maximum cash consideration of €52.6 million (£33.6 million) over a four-year period. On completion of the acquisition, Northgate will acquire an initial 40 percent interest in return for a cash payment of €15.4 million (£9.8 million). The Group then has the option to acquire a further 40 percent interest for a maximum payment of €22.3 million (£14.3 million) two years after completion. In the event that the option is exercised, the Group will then acquire the final 20 percent a further two years later, for a maximum payment of €14.9 million (£9.5 million). The actual amount of the additional payments will represent the lower of the maximum payments and a multiple of 8.5 times the average profit after tax of Fualsa in the previous two years pro rata to the percentage of equity being acquired. The Fualsa board will have equal representation between Northgate and the current owners of Fualsa following completion. Key shareholder members of the Fualsa management team have agreed to remain with Fualsa until at least completion of the earnout period. In addition, senior Northgate operational and finance staff will be permanently based in Spain. Current trading The Group's preliminary results for the year ended 30 April 2002 were announced on 3 July 2002. At that time the Group stated that it remains confident that it will be able to continue to develop and grow its rental business in the UK beyond 2003, through maturing its new sites and by extending both its network and the overall rental market. In addition, it is the Group's intention over the next 12 months to further develop the complementary non-rental products it offers to customers to support its continued growth. Michael Waring, Chairman of Northgate, commented: 'As mentioned in our recent Preliminary Results statement, we are convinced that there are excellent prospects for growth in continental Europe which will complement the ongoing opportunities we see in the UK rental market. 'The acquisition of Fualsa marks our first significant step in our plans to expand into Europe. The Spanish market for light commercial vehicle hire is one of the fastest growing in Europe today and we believe that our timing is right to capitalise on these prospects for the benefit of Northgate shareholders in the future.' Enquiries: Northgate plc Tel: 01325 467558 Steve Smith, Chief Executive Phil Moorhouse, Finance Director Hogarth Partnership Limited Tel: 020 7357 9477 Andrew Jaques Tom Leatherbarrow Note: Euro conversion rate used 0.639 Euro to £1 Sterling This information is provided by RNS The company news service from the London Stock Exchange

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