Harvey Nash Group Regulatory News (HVN)

22 May 2007 07:04

Harvey Nash Group PLC22 May 2007 HARVEY NASH GROUP PLC ("Harvey Nash" or the "Company") Acquisition and Share Placing Harvey Nash today announces that it has conditionally agreed to acquire AlumniAB, ("Alumni") for a maximum consideration of £8.0 million (net of acquired cashof £0.6 million) from Alumni International Sarl. Alumni is ranked the leadingExecutive Search and Strategic Leadership Consultancy in Sweden byAffarsvarlden, the Swedish business publication which prodives analysis oncompanies and financial markets in the region. With operations in Stockholm,Malmo and Gothenburg, the acquisition expands Harvey Nash's European businessinto the fast growing Scandanavian market with further growth planned throughoutthe Nordic region. Alumni specialises in providing executive consulting and leadership services toglobal Fortune 500 companies and larger businesses based in Sweden as well asworking with local government and public services organisations. Both itsportfolio of services and client sector profile are highly complementary toHarvey Nash's European business. Alumni also has a track record of successful expansion and a highly experiencedmanagement team. The acquisition will significantly enhance Harvey Nash'sEuropean footprint, and is another important step in the ongoing development ofits portfolio of services across its geographic regions. In the year ended 30 June 2006, Alumni reported an audited profit beforetaxation of £0.83 million on turnover of £4 million. As at 30 April 2007, Alumnihad net assets of £0.549 million. Magnus Tegborg (the current CEO) and Anders Cedermark (Practice Manager -Industry) will continue to work for Alumni following completion of theacquisition. Alumni International Sarl is owned by Magnus Tegborg, Anders Cedermark, TanjaJibrandt, George Forsman, Jan-Erik Arntzen and Bjorn Robertsson who are allcurrent members of the management of Alumni other than Bjorn Robertsson, who isa previous member of the management of Alumni. The total consideration will be made up of: initial consideration of approximately £4.0 million in cash (net of acquiredcash of £0.6 million); contingent consideration of approximately £530,000 in cash, subject to Alumniachieving certain profit targets for the 3 month period ending 31 July 2007 (the"first quarter consideration"); and further contingent consideration of up to approximately £3.44 million to besatisfied in cash subject to Alumni achieving certain profit targets for themonths 1 May 2007 to 30 April 2011. Accordingly Alumni International Sarl will receive a total maximum considerationof £8.0 million (net of acquired cash of £0.6 million) subject to the profitstargets being met. Financing the acquisition The initial consideration will be funded by way of a vendor placing. HarveyNash has entered into a placing agreement with Numis Securities Limited ("Numis") to place 5,512,500 ordinary shares of 5p each (the "Placing Shares")by way of vendor placing (the "Placing"), with existing and new institutionalshareholders at 80p per share. Harvey Nash proposes to raise approximately £4.41million (excluding expenses) through the issue of the Placing Shares. ThePlacing Shares will represent 7.6 per cent. of the Company's issued sharecapital immediately following admission. In addition, the Company will utiliseits existing banking facilities with the Royal Bank of Scotland to fund costsassociated with the acquisition and acquired cash. The Placing Agreement, which contains customary warranties and an indemnity fromHarvey Nash to Numis, is conditional, inter alia, on Admission occurring on 25May 2007 (or such later time and/or date as Numis and Harvey Nash may agree,being not later than 7 June 2007). Application has been made to the UK Listing Authority and to The London StockExchange for all the new shares to be admitted to the Official List and totrading on The London Stock Exchange's market for listed securities ("Admission"). It is expected that Admission will become effective on 25 May2007 and dealings will commence at that time. It is proposed that the first quarter consideration and further contingentconsideration will be funded through a mix of operating cash flow and debt. Commenting on the acquisition, Harvey Nash Chief Executive, Albert Ellis, said: "This is a fantastic extension of our European business and meets all ouracquisition criteria. This is a major step forward in delivering our strategyof combining successful organic led growth with earnings enhancing, bolt onacquisitions in new and fast growing markets. "Like Harvey Nash, Alumni is a well established business with a strong brand andexcellent senior client relationships. The addition of the Alumni team willfurther strengthen our position as a leading executive consulting business andalso creates a platform for future growth through expanding further into theNordic region." 22 May 2007 Note: A conference call for analysts will take place at 07.30 UK time thismorning. In order to participate, please dial +44 (20) 3003 2666 and ask to beconnected to the Harvey Nash conference call. ENQUIRIES: Harvey Nash Tel: 020 7333 0033Albert Ellis, Chief ExecutiveRichard Ashcroft, Finance Director Numis Securities Tel: 020 7260 1000David ShaptonCharles Farquhar College Hill Tel: 020 7457 2020Mark GarrawayMatthew Gregorowski Notes to Editors: Harvey Nash, a global professional recruitment consultancy and IT outsourcingservice provider, is committed to delivering the very best talent and ITsolutions to a broad base of clients. Its 3,500 staff and associates, operating from 27 offices covering the USA,Europe and Asia, work to the highest levels of integrity, professionalism andquality in providing its unique portfolio of services: executive search, interimmanagement, IT and finance recruitment and IT outsourcing. For more information please visit www.harveynash.com This information is provided by RNS The company news service from the London Stock Exchange