Mcbride Regulatory News (MCB)

12 Feb 2007 07:02

McBride PLC12 February 2007 McBride plc 12 February 2007 McBride, Europe's leading provider of Private Label Household and Personal Careproducts, announces the acquisition of Dasty Italia SpA McBride plc ("McBride") today announces the acquisition of Dasty Italia SpA ("Dasty"), a privately owned manufacturer of private label household cleaningliquids, for a total enterprise value of approximately €29 million. Acquisition highlights • Creates the clear leader in Italian private label household products • Enhances materially McBride's share in the growing Italian discount sector • Considerable further potential for the combined business • Dasty's latest reported annual revenue and profit before tax were €40.4 million and €3.6 million respectively(1) • Expected to enhance earnings per share in the first full year of ownership(2) McBride's strategy is to lead the development of private label household andpersonal care products in Europe through a focus on organic growth supplementedby selected acquisitions. The acquisition of Dasty is highly complementary toMcBride's existing Italian operations in terms of both products and customers.It broadly doubles the scale of McBride's Italian business. Information on Dasty Dasty was founded in 1993 and is a manufacturer of private label householdcleaning liquids, mainly in categories such as degreaser, heavy and light dutyliquids, toilet cleaners and cream cleaners. Nearly 80% of its revenues aregenerated in Italy with most of the remainder sold in the Netherlands, Germanyand Spain. The company has a strong focus on the hard discount sector with overhalf of all revenues coming from this sector in Italy. Its production facilities are located about 30 miles north east of Milan and asimilar distance from McBride's existing Italian operations. They include alarge modern well invested factory that commenced production in 2003. It hasaround 100 employees. In the year ended 31 December 2005, Dasty reported (in compliance with ItalianGAAP and other local reporting requirements) revenues of €40.4 million andoperating profit and profit before tax of €3.9 million and €3.6 millionrespectively. At 31 December 2005, Dasty's gross assets were €25.9 million.(1) Italian retail and household products markets The Italian retail market is fragmented by West European standards butconcentration has accelerated in recent years with the rise of supermarkets,discount stores and hypermarkets fuelled partly by increased internationalinvestment. Growth in these store formats is expected to continue with manymajor retailers having significant store expansion programmes. The Italian household products market is one of the largest in Europe with avalue in 2006 of €3.4 billion at retail selling price (source: IRI). Privatelabel penetration of the market is amongst the lowest in Western Europe at 21%by volume. The consolidating retail environment, coupled with growth of larger storeformats, where private label is generally more prevalent, and the currentrelatively low share of private label in household products, are supportive forthe future of private label household products. The attractive profile of theprivate label market is reflected in market data for 2006 indicating thatprivate label outperformed the overall Italian household products market in bothvolume and value terms. Growth was particularly strong in household cleaners,the segment in which Dasty is focused. Terms of the acquisition The transaction is to be effected by the acquisition of the whole of the issuedshare capital of Dasty from the Arizzi family. Total consideration for theacquisition of Dasty's share capital is expected to be approximately €24million, subject to adjustment to the extent that net debt assumed on completionexceeds or is less than €5 million. This represents a total enterprise value forthe business of approximately €29million. The consideration for the acquisitionof Dasty's share capital shall be payable from existing Group resources, incash, on completion, which is expected to occur on or around 28 February 2007. Impact of the acquisition Italy is one of McBride's largest geographic markets in terms of revenues andthe acquisition is expected to almost double the group's revenues in Italy,making it McBride's third largest market. The Italian market is fragmented interms of producers of private label household products with several participantsof similar scale to McBride and Dasty, the combination of which will create theclear market leader. Dasty will be integrated into McBride's existing Italian business which is partof the group's Western Continental Europe division. Dasty's current directors,Fabrizio and Roberto Arizzi, have agreed to remain with McBride as part of theenlarged Italian business. Integration of the acquisition is expected to becomplete within 12 months of completion and to give rise to significant revenueand cost synergies. Commenting on the acquisition, McBride's chief executive Miles Roberts said: "Italy has been a successful market for McBride in recent years and we aredelighted with the opportunity Dasty presents to build on this. Dasty is a highquality business and the combined business creates a great platform to buildfurther success in the Italian market and increase our business with the growingdiscount sector." For further information please contact: McBride plcMiles Roberts, Chief Executive 07748 180076Bob Beveridge, Finance Director 07876 593182 Financial Dynamics 020 7831 3113Andrew Dowler (1) The financial information relating to Dasty was reviewed by its Board of Auditors who issued a positive opinion on such information in accordance with Article 2429 of the Italian Civil Code. (2) The statement regarding enhancement of earnings per share is before synergies, integration costs associated with the acquisition and amortisation of acquired intangible assets. In addition, no statement in this announcement is intended to constitute a profit forecast for the financial years ending 30 June 2007 or any other period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or less than those for the relevant preceding financial periods of McBride. Rather, these statements should be construed as references to potential enhancements to the earnings that might otherwise have been earned during the relevant financial period. This information is provided by RNS The company news service from the London Stock Exchange