FRM.L Regulatory News (FRM)

21 Mar 2005 07:02

Formation Group PLC21 March 2005 21 MARCH 2005 FORMATION GROUP PLC Acquisition of business - Capital Sports Solutions Formation Group PLC ("Formation" or the "Group"), the leading integrated sportsmarketing and management business, is pleased to announce the establishment of anew financial services business. The new business, which will trade as Capital Sports Solutions Limited ("CapitalSports Solutions"), will be headed by David McKnight and will be effected by theacquisition of the trade and assets of the financial brokerage business ofTransworld Sport, a consultancy wholly owned by Mr McKnight. Formation will payMr McKnight an initial consideration of £1, together with deferred considerationof up to £3,100,000, contingent on the financial performance of the new businessover the next three years. Capital Sports Solutions will add substance and scaleto the Legal and Professional services division outlined in previouscommunications by the Group. The Group has four trading divisions SportsMarketing, Wealth Management, Legal and Professional Services andRepresentation. The service provided by Capital Sports Solutions is the arrangement of bespokecapital for sporting clubs to restructure their finances and cash flowarrangements. This source of capital will represent an alternative cash flowfacility to clubs from the traditional lenders. The Board believes that it is anopportune time to enter the market, and that the division is complementary toour existing service offerings. Capital Sport Solutions provides these facilities by securitising financeagainst an organisation's future revenue streams, whether that be transfer fees,corporate partner / sponsorship income or television income. This facility canhave the twin effects of accelerating cash flows and removing uncertainty andrisk in many instances due to the nature of the lending. David McKnight is 47 years of age and has a track record of working within sportespecially Rugby, where he has acted as an agent for a number of years. He hasalso worked for Barclays Mercantile & Grindlays Bank. David has financednumerous transactions in relation to the transfers of football players. The Directors of Formation expect a number of benefits to accrue as a result ofthe acquisition of Capital Sports Solutions. It will provide the Group with anew and profitable revenue stream and another experienced professional who hasworked in and around the sporting community. Furthermore, the combination ofFormation and David's connections in the sporting world will provide additionalbusiness opportunities that might not otherwise have been available. Neil Rodford, Chief Executive of Formation Group, commented: "This is another step in the Group's development as we extend our portfolio ofservices to the football sector and wider sporting community as a whole. I amexcited by the potential of this business over the medium to long term and lookforward to working with David in order to fulfill its potential." David McKnight added: "I am delighted at the prospect of joining forces with Formation . Their fullyintegrated model offers a tremendous amount of scope to grow my business." Enquiries: Formation Group PLC Contact DetailsNeil Rodford, Chief Executive Tel: +44 (0) 1625 536411Mark Page, Finance Director www.formationgroupplc.com --------------------------- Press Relations Contact DetailsICIS Limited Tel: +44 (0)20 7651 8688 / +44 (0)7802 442486Archie Berens archie@icisnet.com --------------------Caroline Evans Jones caroline@icisnet.com ---------------------- This information is provided by RNS The company news service from the London Stock Exchange