CNCT.L Regulatory News (CNCT)

22 December 2015

Connect Group PLC

("Connect Group" or "the Company")

Payment of deferred consideration pursuant to the acquisition of Tuffnells Parcels Express

Pursuant to the Connect Group announcement dated 19 December 2014 in respect of the acquisition of the entire issued share capital of The Big Green Parcel Holding Company Limited, whose principal subsidiary trades as Tuffnells Parcels Express ("Tuffnells"), the Company today announces that, in light of Tuffnells' strong performance, the conditions relating to the payment of the deferred consideration for the first year of the three-year earn-out period to the Tuffnells Management Sellers and Option Sellers have now been satisfied in full.

Accordingly, pursuant to the acquisition terms, the Group will pay deferred consideration of approximately £8.7million to the Tuffnells Management Sellers and Option Sellers by means of (i) the payment of £4,913,341.11 in cash and (ii) the allotment and issue of a total of 2,164,181 new ordinary shares in the Company (the "New Ordinary Shares"), together with a separate payment of £149,420.87 in cash representing the value of dividend equivalents that would otherwise have been payable in the relevant earn-out period on the number of New Ordinary Shares being issued. The New Ordinary Shares will rank pari passu with the existing ordinary shares of the Company. The maximum amount of deferred consideration payable to Tuffnells Management Sellers and Option Sellers over the three-year earn-out period is £15.3 million. Due to changes within the composition of the original Tuffnells management team, the Company currently anticipates that the proportion of the deferred consideration to be received by the Tuffnells Management Sellers and Option Sellers through the issue of new ordinary shares in the Company will be approximately 40 per cent. of this amount.

The Financial Conduct Authority (the "FCA") has approved the admission of the New Ordinary Shares to the Official List and the London Stock Exchange has granted permission for the New Ordinary Shares to be admitted to trading ("Admission") and it is expected that Admission will become effective on 23 December 2015.

The New Ordinary Shares represent approximately 0.88 per cent. of the enlarged issued share capital of the Company immediately after the issue of the New Ordinary Shares and, as a result, the Company's capital will now consist of 246,559,389 ordinary shares of 5 pence each with voting rights. The Company does not hold any shares in Treasury at the date of this announcement and, therefore, the total number of voting rights in the Company will now be 246,559,389

The above figure can be used by shareholders as the denominator for the calculations by which to determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure and Transparency Rules.

The capitalised terms not otherwise defined in this announcement have the meanings given to them set out in Part XXII of the Company's prospectus dated 12 November 2014.

Enquiries:

About Connect Group PLC:

Connect Group PLC is a leading specialist distributor operating in large and diverse markets. The Group has four separate divisions, connecting suppliers to customers in an efficient, knowledgeable and service oriented way:

· Connect News & Media - Encompassing: Smiths News and Dawson Media Direct. Smiths News is the UK's largest newspaper and magazine wholesaling business with an approximate 55 per cent. market share. It distributes newspapers and magazines on behalf of the majority of the major national publishers as well as a large number of regional publishers. It serves approximately 30,000 customers across England and Wales, including large general retailers as well as smaller independent newsagents delivering approximately 35 million newspapers and 11 million magazines weekly. The News business also includes Pass My Parcel, a new Click & Collect delivery service for outbound and returns parcels with Amazon as its first client; Dawson Media Direct is an international media direct business supplying newspapers, magazines, inflight entertainment technology and content to over 80 airlines in 50 countries.

· Connect Books - Combining a number of recognised brands in print and digital bookselling across four customer focused business units: Wholesale, including Bertrams Books; Libraries, including Dawson Books; Direct to Consumer, including Wordery and International, including Houtschild. The division serves over 8,200 customers in approximately 100 countries, with over 156,000 in stock titles and access to over a further seven million consumer and twenty million academic titles.

· Connect Education & Care - A leading independent supplier of consumable products through The Consortium and West Mercia Supplies. The division holds an approximate 5 per cent. market share of the estimated addressable market, comprising the consumables element of education spend. It serves over 30,000 customers with an extensive range of over 40,000 products across a branded, own-brand and value range, including exercise books, stationery, arts and craft and cleaning products through a paper based catalogue and increasing focus on e-commerce trading with schools.

· Connect Parcel Freight - Tuffnells is a leading provider of next-day B2B delivery of mixed freight/ parcel consignments, specialising in items of irregular dimension and weight, examples of which include bulky furnishings, building materials and automotive parts. Tuffnells offers distribution coverage throughout the UK through a network of 37 depots and operates a largely depot-to-depot operational model, providing over 10 million deliveries per annum, through a wide range of services to over 4,200 largely 'SME' customers.