ARL.L Regulatory News (ARL)

23 Mar 2006 15:07

SMC Group Plc23 March 2006 23 March 2006 For immediate release SMC Group Plc ("SMC", "the Group" or "the Company") Acquisition of Alsop Highlights • Acquisition of the business and assets of Alsop, a Stirling Prize winning and internationally respected architecture and design company headed by Will Alsop • The acquisition is expected to be earnings enhancing • The acquisition will combine SMC's focused approach to project delivery with Alsop's reputation for creative flair. Alsop will provide SMC with enhanced status, design input and recruitment potential • With offices in London, Toronto, Beijing, Shanghai and Singapore, Alsop will add significantly to SMC's international reach • Alsop is the sixth acquisition by SMC since its admission to AIM in June 2005 • Initial consideration is £1.8 million payable immediately - £900,000 in cash and the issue of 624,277 new SMC ordinary shares at a price of 144.17p per share. • A performance related payment to William Alsop, Colin Gilmore-Merchant and Stephen Pimbley based on profitability for each of the 3 years to December 2008. These payments will be satisfied by a mix of cash and shares, with SMC retaining the option to pay this all in cash • Under the SMC EMI Option scheme, certain Alsop executives to be issued with a total of 277,456 options over ordinary shares in SMC, each with an exercise price of 144.17p • In line with previous acquisitions by SMC, every full time member of Alsop staff (circa 55 people) will receive £1,000 worth of SMC ordinary shares at a price of 144.17p • Current Alsop projects include the Palestra project in Southwark and the listed building, Victoria House in London as well as buildings in Toronto, Shanghai and Beijing. Commenting on the deal, Stewart McColl, Chief Executive of SMC Group, said: "Iam very excited at being able to bring into the SMC Group such a world renownedarchitect as Will Alsop and his team. This acquisition will increase our profilewithin the international architectural industry significantly increasing ourglobal exposure, particularly to larger, higher margin projects." Will Alsop, founder and principal of Alsop, commented, "At Alsop, we attractexciting and dynamic design commissions from all around the world. Joining theSMC Group will allow us to continue to apply our creative skills within asuccessfully structured business environment with a strong projectimplementation record." For further information please contact: SMC Group Plc Tel: 44 (0) 20 7495 5335Stewart McColl Noble & Company Limited Tel: 44 (0) 20 7763 2200Matthew Hall Bell Pottinger Corporate & Financial Tel: 44 (0) 20 7861 3232David Rydell/Geoff Callow SMC Acquires Alsop SMC Group plc, the AIM-listed leading group of architects and designers, todayannounces that it has agreed to acquire the business and assets of Alsop DesignLimited (in administration) ("Alsop"). The business and assets of Alsop will befully integrated into the existing SMC Group and will operate as "SMC Alsop".SMC expects the acquisition to be earnings enhancing. An amount of £1.7 million is payable immediately, comprising £800,000 in cashand the issue of 624,277 new SMC ordinary shares ("New Ordinary Shares") at aprice of 144.17p per share. Furthermore, SMC will pay immediately a total of£100,000 in cash to three key Alsop personnel. In addition, deferredconsideration will be payable in annual stages, from July 2007 until July 2009,to William Alsop, Colin Gilmore-Merchant and Stephen Pimbley based on theprofitability of SMC Alsop for each of the three years ending December 2008.These payments will be satisfied by cash or by a combination of cash and SMCordinary shares. Such combination will be at the discretion of SMC, subject tothe restriction that no more than 50 per cent. of the deferred considerationshall be paid by way of the issue of SMC ordinary shares. The deferredconsideration will be calculated, and is payable, as follows: • 45% of the profit before tax of SMC Alsop in excess of £262,500, for the period from the date of this acquisition to 31st December 2006. This amount will be payable on 1 July 2007; and • 45% of the profit before tax of SMC Alsop in excess of £350,000, for each of the years ended 31 December 2007 and 31 December 2008. These amounts will be payable on 1 July 2008 and 1 July 2009 respectively. Under the SMC EMI Option scheme, certain Alsop executives will be issued with atotal of 277,456 options over ordinary shares in SMC, each with an exerciseprice of 144.17p. In line with previous acquisitions, every full time member ofAlsop staff (circa 55 people) will receive £1,000 worth of SMC ordinary sharesat a price of 144.17p. Alsop is a highly respected architecture and design team that over the lasttwenty years has established an excellent international reputation. Previousprojects include the £97million Regional Government Headquarters in Marseilles,The Cardiff Bay Visitors' Centre, North Greenwich Tube Station, and the PeckhamLibrary which was named Building of the Year as a winner of RIBA's StirlingPrize in 2000. Alsop has 44 professional staff based in London, Canada and the Far East. Alsophas a strong and experienced management team with one principal, Will Alsop, andseven sector heads including the Managing Director, Colin Gilmore-Merchant.Current projects include the Palestra office development in Southwark, a mixeduse port development in Rotterdam and offices and hotels at the Shanghai PortInternational Cruise Terminal. SMC believes that more and more clients are looking for creative design as anessential element of their projects. The board of SMC believes that theacquisition of the Alsop business will be of immense value to SMC within thearchitectural profession as it will greatly assist in raising the profile of theGroup and bring an extra creative dimension to the Group. The addition of the Alsop business will also increase SMC's coverage in thepublic sector and in the masterplanning, urban design and regenerationactivities specifically. Alsop is also strong in the market sectors oftransportation, residential, offices and education (both schools anduniversities). Alsop's current clients include Transport for London DLR, Urban Splash, theLondon Borough of Southwark, De Wilden Vastgoed, Kings College London, Skanska,The City of Bradford Metropolitan District Council, The Shanghai PortInternational Cruise Terminal, Goldsmiths College and Clarke Quay Singapore. With the addition of Alsop, the SMC group will have approximately 330 members ofstaff. Application will today be made for the New Ordinary Shares to be admitted totrading AIM. It is expected that dealings in the New Ordinary Shares willcommence on 29 March 2006. For the financial year ended 31 December 2005, Alsop's loss before tax was £690kon revenue of £3.5 million. Adjusting for non-recurring and exceptional items anormalised profit before tax of £71k was reported for the same period. - ends - Notes to Editors SMC Group Plc is the holding company for a group of architects and designers.It has established expertise in a broad range of sectors, including residential,retail, industrial, workplace, transportation, leisure and education. On 3rdFebruary 2006 the Group announced the acquisition of Ian Penrose Architects andCovell Matthews Architects. These additions to the Group have enabled SMC toexpand its national coverage throughout England, with offices in London,Warwick, Manchester, Leeds, Birmingham, Liverpool, Lancaster, Exeter, Plymouthand Cambridge. The Group's core strategy is to create an architectural group with the scale andexpertise to access the most profitable schemes across a range of sectors andgeographical locations. The Group intends to focus on its organic growth,increasing its share of the UK market and securing larger, higher marginprojects. The Group plans to complement this organic growth withearnings-enhancing acquisitions in order to consolidate its geographic andsector coverage. On 5th September 2005 the Group announced its maiden interim results for the sixmonths ended 30th June 2005. SMC reported turnover of £5.4m (an increase of 47%compared to the same period in 2004) and profit before tax of £1.1m (an increaseof 110% compared to the same period in 2004). In that announcement the Groupannounced its intentions to introduce a maiden dividend in June 2006. Full yearresults to 31st December 2005 are scheduled to be announced on 27th April 2006. This information is provided by RNS The company news service from the London Stock Exchange