Kazera Global Regulatory News (KZG)

1 May 2007 07:15

Worthington Nicholls Group plc01 May 2007 Worthington Nicholls Group plc Acquisition of three independent companies Placing to raise £20 million of new development capital and £3.4 million of replacement capital RNS Release 1 May 2007 Worthington Nicholls Group plc ("Worthington Nicholls" or "the Group"), aleading independent installer of air conditioning, heating, ventilation andchilled water systems, announces today that it has completed the acquisition ofthe entire issued share capital of Woods Environmental Group Limited, EuroProperty Services (London) Limited and Classic Interiors Contractors Limited(the "Acquisitions"). The Directors expect the Acquisitions to be earningsenhancing in their first full financial year as part of the Group. Furtherdetails on the Acquisitions are set out below. Today, the Group also announces that it has raised, through Blue Oar SecuritiesPlc, £20 million, before expenses, by way of an institutional share placing of11,764,706 new ordinary shares of 1 penny each in the capital of the Company("Ordinary Shares") at £1.70 per new Ordinary Share ("Placing"). The Placing isconditional upon approval of certain resolutions by the shareholders at anExtraordinary General Meeting to be held on 24 May 2007. In addition, to meet institutional demand for shares in the Group, MarkWorthington, Chief Executive of the Group, has sold 2 million Ordinary Shares at£1.70 per share. Following this exercise and completion of the Placing, Markwill retain a significant shareholding of approximately 8% in the Group. The new funds raised will be used to provide the working capital necessary forfurther organic Group expansion in the UK and Europe and for furtheracquisitions. Of the funds earmarked to fund organic growth, it is notable that a proportionof these will be applied to fund growth within the businesses run by the Group'sfirst two acquisitions, air conditioning installers Project Air Limited andspecialist electrical contractor Lumenglow Limited, whose respectiveperformances have exceeded directors' expectations and therefore requireadditional funds to support their accelerating growth. On the acquisition front, the Group continues to see numerous opportunities andhas identified a number that it is exploring or wishes to explore. The statedobjective is to make acquisitions only where it is expected that they would addto or strengthen the Group's offering on an earnings enhancing basis. Mark Worthington, Chief Executive of Worthington Nicholls, said:"We are pleased to welcome new institutional shareholders, encouraged by thecontinued support from existing shareholders and delighted overall by the levelof appetite for our shares. As a Group we now have ample funds to maintain ourcurrent rate of growth, and with today's three new acquisitions, we are furthertoward our goal of becoming a pre-eminent support services supplier in theheating, ventilation and air conditioning sector in Europe." Information on the AcquisitionsThe Acquisitions extend the Group's geographical coverage in England, providegreater client sector diversification, an enhanced range of services that can beoffered to clients and present the opportunity to implement clearly identifiedcost savings. The Directors expect that the Acquisitions will be earningsenhancing in their first full financial year as part of the Group. Woods Environmental Group Limited ("Woods")The Group has, conditional upon consent from Woods' bank being received,acquired the entire issued share capital of Woods. The initial considerationcomprises £1,000,000 in cash and £500,000 to be satisfied through the issue of294,117 new Ordinary Shares at £1.70 per share. Upon achieving certain profitperformance criteria for the financial years 2008 and 2009, furtherconsideration will become payable, split equally between cash and new OrdinaryShares. Woods is a specialist in the design, supply, installation, commissioning andmaintenance of all types of air conditioning, heating and ventilation systems,providing full turnkey projects to the building services industry with a highprofile within the commercial office sector. The acquisition of Woods will help provide client diversification to the Group'sexisting retail and hotel sector focus and further geographical coverage, as itpresently operates from three locations Leeds, Wilmslow and London. Followingthe acquisition of Woods, its Wilmslow head office will be relocated to that ofWorthington Nicholls, which should present an opportunity to increase operatingefficiencies and help to facilitate organic growth. Woods reported profits before tax of £0.32 million on sales of £7.80 million inits last audited accounts for the financial year ended 31 May 2006. Currenttrading is 75 per cent. higher than the same period last year, with annualforecast sales of £14 million and forecast profit before tax of £0.72 millionfor the year to 31 May 2007. As at 31 December 2006, Woods had net assets of£0.32 million. Ian Woods, the founder and managing director of Woods, will remain with theenlarged Group following completion of the deal. Euro Property Services (London) Limited ("EPS")Founded in 1989, EPS designs, installs and maintains air conditioning systemsprincipally for the five star hotel sector and also has an agency agreement tosupply and install specialist restaurant kitchen machinery. It provides anon-contracted 24-hour, 365-day-a-year emergency call out service. Its customersare largely branded hotels located predominantly in the M25 corridor, andinclude establishments such as The Ritz, The Savoy and The Waldorf. With officesin Hammersmith EPS gives Worthington Nicholls an important base within London. It reported sales of £3.18 million in its last audited accounts for thefinancial year ended 31 December 2006, with profit before tax of £1.14 million.As at 31 December 2006, EPS had net assets of £2.25 million. The Group has conditional upon payment of the initial consideration acquired theentire issued share capital of EPS for an initial consideration of £1,674,000 incash and £1,174,800 to be satisfied through the issue of 691,058 new OrdinaryShares at £1.70 per share. Upon achieving certain profit performance criteriafor the financial years 2007 and 2008, further consideration will becomepayable, split between cash and new Ordinary Shares. As part of the terms of the acquisition, founder and managing director of EPS,Michael Stockford, will remain within the enlarged Group following completion ofthe deal. His management team will be augmented by Nigel Horner, a WorthingtonNicholls operational director of three years. Nigel will become Group generalmanager for the London area with responsibility for the integration of EPS. Classic Interiors Contractors Limited ("Classic Interiors")The Group has conditional upon payment of the initial consideration acquired theentire issued share capital of one of its key subcontractors, Classic Interiors.The initial consideration payable is £500,000 in cash and £1,200,000 to besatisfied through the issue of 705,882 new Ordinary Shares at £1.70 per share.If certain 2007 turnover performance criteria are satisfied, further deferredconsideration payments will be due, payable in cash. The acquisition strengthens the Group's client base and extends its footprint inthe South East of England. Classic Interiors provides Worthington Nicholls with light building andredecoration services to restore hotel rooms and public spaces to agreedstandards following major air conditioning or heating and ventilationprogrammes. Classic Interiors started trading in 1980 and today employs 16staff. It reported profits before tax of £0.89 million on sales of £3.23 millionin its last audited accounts for the financial year ended 31 December 2006. Asat 31 December 2006, Classic Interiors had net assets of £0.58 million. Based in Dartford, Kent, Classic Interiors' services include building andconstruction, as well as shop fitting, site and project management and officerefurbishment. Its customers include Early Learning Centre, Holiday Inn andCrowne Plaza Hotels. In 2006, over a third of Classic Interiors' total turnover was generated byWorthington Nicholls itself. Over the last two years, the Group has spentapproximately £3 million with Classic Interiors. Senior directors of Classic Interiors, Mark Brown, Lee Barnacle and RobertVinicombe will remain with the enlarged Group after completion of the deal. Lock-in agreements 1,279,292 Consideration Shares, representing 75.6 per cent. of the totalConsideration Shares, will be subject to a lock-in agreement which, save inexceptional circumstances, prohibits the vendors of the Acquisitions fromselling their shares for one year from completion and, thereafter, subjects themto orderly market arrangements for a further year. Details of the placingThe Group has raised £20 million, before expenses, through a placing arranged byBlue Oar Securities Plc of 11,764,706 new Ordinary Shares at £1.70 per OrdinaryShare. The placing of new Ordinary Shares, which will rank parri passu in all respectsto existing shares, is conditional on their admission to trading on AIM("Admission"), which is expected to be on 25 May 2007. On Admission, the Group will have a market capitalisation of approximately£147.9 million at the Placing Price. The Placing Shares will representapproximately 13.5 per cent. of the enlarged share capital at Admission. Owing to the acquisition opportunities available to the Group and therequirement for additional working capital for these businesses to achievefurther projected organic growth, the Directors consider that the Placing is inthe best interests of the Group. The Directors intend to utilise the net proceeds of the Placing, beingapproximately £19.1 million, to pursue additional, identified acquisitionopportunities and to provide additional working capital to assist furtherorganic expansion of the enlarged Group. Extraordinary General MeetingAn Extraordinary General Meeting of the Group will be held at 10 a.m. on 24 May2007 at St James's Court, Brown Street, Manchester M2 2JF. The following resolutions will be proposed at the EGM: (i) resolution number 1 will be proposed as an ordinary resolution to increasethe authorised share capital of the Group to the extent specified in theresolution;(ii) resolution number 2 will be proposed as an ordinary resolution for thepurpose of authorising the Directors, pursuant to section 80 of the CompaniesAct 1985 (the "Act") to allot relevant securities to the extent specified in theresolution; and (iii) resolution number 3 will be proposed as a special resolution for thepurpose of empowering the Directors, pursuant to section 95 of the Act to allotequity securities (as defined in the Act) outside Shareholders' statutorypre-emption rights under the Act. Enquiries: Worthington Nicholls 0870 609 1829Mark Worthington, Chief ExecutiveDavid Levis, Corporate Director Gresham PR Ltd 020 7404 9000Neil Boom / Laura Black Blue Oar Securities plc 020 7448 4400Rhod Cruwys / Romil Patel This information is provided by RNS The company news service from the London Stock Exchange