Diploma Regulatory News (DPLM)

28 Aug 2007 07:02

Diploma PLC28 August 2007 12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX TELEPHONE: +44 (0)20 7549 5700 FACSIMILE: +44 (0)20 7549 5715 FOR IMMEDIATE RELEASE 28 August 2007 DIPLOMA ACQUIRES 75% of AMT VANTAGE HOLDINGS INC. FOR A MAXIMUM OF £14.3m (C$30.0m) Diploma PLC, the international specialised distribution group, is pleased to announce the acquisition of 75% of AMT Vantage Holdings Inc. ("AMT"), a leading distributor of speciality electrosurgery and endoscopy equipment and related consumables to hospitals across Canada. AMT operates from a 10,000 square foot leasehold facility based in Kitchener, Ontario which is one hour south west of Toronto. The Company employs 32 staff. AMT supplies specialised equipment and consumables to physicians in hospitals when carrying out electrosurgical procedures. Products include surgical smoke evacuation; conductivity pads; electrodes; generators and probes and flexible endoscopic accessories. It has also established an operation to serve the new growth market for vessel sealing products. A large proportion (ca. 80%) of AMT's revenues comes from multi-year customer contracts with hospitals and buying groups. Sales efforts are focused on nurse managers, physicians and surgeons. AMT has strong long term relationships with its principal suppliers. AMT has delivered strong growth in recent years by penetrating the market with several specialised products. These are mostly consumable products and are typically supplied under multi-year contracts with hospitals, which gives a predictable base-load of business for the future. There is considerable scope for further organic growth with these products by increasing market penetration in existing and new customers. In addition, AMT is broadening its product offering by signing up new suppliers and leveraging its position in electro-surgery by expanding into other surgical disciplines and new markets. Prior to acquisition by Diploma PLC, AMT was owned equally by its management comprising Bruce MacDonald, Bill Roberts and Dan Webb. The minority interest of 25% in AMT will be retained by these three individuals. Put and Call options exist over the minority shares which can be exercised after three and five years, based on an agreed multiple of earnings and subject to a maximum cap. Bruce MacDonald and Bill Roberts will remain with AMT as directors and will work closely with the management of Somagen, a fellow group company. Somagen supplies clinical diagnostic products to hospital laboratories in Canada. AMT's sales in the year ended 30 November 2006 were C$17.9m (£8.6m). Its profit before tax was C$0.8m (£0.4m) after shareholder bonuses which will not apply after acquisition. Gross assets at 30 November 2006 were C$5.0m (£2.4m). The financial statements of AMT for the year ended 30 November 2006 were subject to a review engagement report in accordance with Canadian generally accepted standards for review engagements. A review engagement does not constitute an audit. At completion, net assets are expected to be approximately C$4.0m (£1.9m), including net cash of approximately C$1.0m (£0.5m). The initial cash consideration to be paid for 75% of the business, which will be met from the Group's existing cash resources, is C$27.5m (£13.1m), before acquisition costs. This may be subject to minor adjustment based on the net assets at completion. Further deferred consideration up to a maximum of C$2.5m (£1.2m) may be payable depending on the operating profit of AMT in the year ending 30 September 2008. The Board expects this acquisition to be earnings enhancing for the Group in the 2007/08 financial year. Bruce Thompson, Chief Executive of Diploma PLC said: "The acquisition of AMT fits with Diploma's strategy in its Life Sciences Canadian sector of increasing its presence in the health care market and will provide a solid impetus to further growth in this market." For further enquiries please contact: Bruce Thompson, Chief Executive Officer 020 7549 5700 Nigel Lingwood, Group Finance Director 020 7549 5705 Ian Seaton, Bankside Consultants 020 7367 8891 NOTE TO EDITORS: Diploma PLC is an international group of specialised distribution businessesoperating in three sectors: Life Sciences - suppliers of consumables, instrumentation and related servicesto research, environmental and clinical diagnostic laboratories. Principalcompanies are Anachem, a1-envirosciences and CBISS in Europe and Somagen inCanada. Seals - Suppliers of hydraulic seals, gaskets, cylinders and attachment kits forheavy mobile machinery. Principal companies are Hercules Bulldog SealingProducts and HKX in North America and FPE in the UK. Controls - Suppliers of specialised wiring, connectors, control devices andfasteners for a range of technically demanding applications. Principal companiesare IS Group in the UK and US, Sommer Filcon in Germany and Hawco in the UK. Within each of these sectors, the Diploma businesses serve industry segmentswith long term growth potential and with the opportunity for sustainablesuperior margins through the quality of customer service, depth of technicalsupport and value adding activities. Further information on Diploma PLC can be found at www.diplomaplc.com This information is provided by RNS The company news service from the London Stock Exchange