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Vebnet (Hldgs) PLC (VBT)

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Monday 02 October, 2006

Vebnet (Hldgs) PLC

Acquisition

Vebnet Holdings PLC
02 October 2006


 
                          Vebnet Acquires 4th Contact                           


Vebnet (Holdings) plc ('Vebnet') announces that it has acquired the entire
issued share capital of 4th Contact Limited ('4th Contact') from Star Technology
Services Limited, part of Messagelabs Group, for a maximum consideration of
£661k.

4th Contact is a provider of online Total Reward Statement and flexible benefits
technology to 67 clients with over 20,000 enrolled employees. For the year ended
31 July 2006 4th Contact generated unaudited revenues of £1,010k and incurred an
operating loss of £326k. An estimated 87% of this total revenue is annualised
recurring. No pre-transaction liabilities of 4th Contact are being transferred
to Vebnet as a result of this acquisition. The business is based in London, was
established in 2000 and currently employs 11 staff.

Of the £524k initial consideration, £319k has been satisfied in cash and £205k
by the issue of 145,997 Vebnet shares at a price of 140.65p per share, being the
average closing price over the previous 10 business days. There is a deferred
cash consideration up to a maximum of £137k payable in three tranches between 31
January and 30 September 2007. The actual deferred consideration payable is
subject to agreed targets on revenue retention.

Application has been made for the consideration shares to trade on the AIM
market of the London Stock Exchange. Dealings in the consideration shares are
expected to commence on 5 October 2006.

Gerry O'Neill, Chief Executive, commented 'The acquisition of 4th Contact is
another significant development for Vebnet. This provides us with additional
scale in both client and enrolled employee numbers. 4th Contact has won some
high profile clients including Walt Disney, Daimler Chrysler, Warner Brothers,
Volkswagen and The London Stock Exchange.'

'This acquisition is expected to be earnings neutral in our current financial
year ending 30 June 2007 and earnings enhancing in future financial years. It
also increases our market share, reinforces our position as the leading provider
of flexible benefits technology, and marks the start of what we believe will be
a period of further consolidation in a still growing market.'


Enquiries

Vebnet                                                                          
Gerry O'Neill (CEO)                               0131 270 5502; 07990 584096;  
                                                             [email protected]  
Stephen Thurlow (Finance Director)                0131 270 5503; 07899 912522;
                                                          [email protected]  

Seymour Pierce (NOMAD and broker)                                               
Jonathan Wright                                                 0207 107 8000;
                                             [email protected]  
Bankside Consultants (PR)                                                       
Charles Ponsonby,                                               0207 367 8851;
                                                [email protected] 

 
Note to Editors

Vebnet's core business is to develop, distribute and implement valuable and cost
effective internet-based solutions and services to support the communication,
delivery and administration of fixed and flexible employee benefit schemes.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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