Midwich Group Regulatory News (MIDW)

For Immediate Release 8 September 2016

Midwich Group plc

("Midwich" or "the Group")

Acquisitions of Holdan Limited and Wired Limited

Midwich, a specialist audio visual and document solutions distributor to the trade market with operations in the UK and Ireland, France, Germany and Australasia, is pleased to announce the acquisition of Holdan Limited ("Holdan" or "the Company") in the UK for a maximum consideration of approximately £7.9m (the "Holdan Acquisition") and the acquisition of Wired Limited ("Wired") in New Zealand.

Holdan is a value-added distributor of technology solutions focused on the broadcast, professional video and traditional audio-visual markets. The company is based in Glossop, near Manchester and currently employs 35 staff. Holdan is a leader within the UK broadcast market, and has a significant and growing export business. The Company traded with 515 mostly specialist broadcast customers in 2015, an 11% increase on the previous year. In addition to hardware distribution, the Company provides a broad spectrum of services, including demonstrations, system design, configuration, and repair facilities to the trade - providing much needed support to users of broadcast and professional video equipment. In the year ended 31 December 2015 Holdan reported annual turnover of £20.6m and profit before tax of £1.1 million. The Company has continued to perform well in 2016.

Midwich has acquired 75% of the issued share capital of Holdan from Chris Daniels and Allan Leonhardsen. In line with the Company's long term succession plan, Chris Daniels has stepped down as Holdan's managing director, but will continue with the business on a full time basis before retiring in 2017. Allan Leonhardsen has become Holdan's managing director with immediate effect. Allan joined the business in 2003 and has been the sales director for the past twelve years. Kieron Seth becomes sales and marketing director, adding sales to his previous marketing responsibilities.

The Holdan Acquisition has been funded from the existing cash resources of the Group. The structure of consideration is in line with the Group's previous approaches, with 75% of Holdan being acquired at the time of announcement. Midwich has options to acquire the remaining 25%, over the next three years on a pre-determined methodology linked primarily to earnings growth. Consideration for the initial 75% of the Company is split £3 million on completion and £1.5 million after 12 months.

In addition, the Group has incurred transaction fees and expenses in connection with the Holdan Acquisition of approximately £0.1m. The Holdan Acquisition is expected to be immediately earnings enhancing for the Group.

Wired is a small New Zealand based AV distributor with offices in Wellington and Auckland specialising in HD distribution solutions for the domestic and commercial market. The acquisition augments Midwich's existing market position and capability in the Australian and New Zealand markets. Wired had a revenue of NZ $2 million in the year to 31 March 2016.

As outlined at the time of IPO, the acquisitions of Holdan and Wired are in line with Midwich's strategy to grow operations through a combination of organic development and selective infill acquisitions. Holdan fits Midwich's UK & Ireland acquisition criteria as it adds to the Group's growing presence in the broadcast and professional video market sectors. Furthermore, the Holdan Acquisition advances the Group's penetration in Europe with c.18% of Holdan's turnover in the year ended 31 December 2015 derived from sales in mainland Europe. Likewise, Wired provides some additional scale with a complementary offering in New Zealand.

Stephen Fenby, Managing Director of Midwich commented:

"I am delighted to welcome Allan, Chris, Kieron and the rest of the Holdan team to the Midwich Group. We have admired the expertise and reputation of Holdan for some time and look forward to working together in the future. We recognised some time ago that the broadcast and professional video markets are a natural adjunct to our traditional audio visual activity. Having made some headway in penetrating these markets ourselves, we believe that the expertise and focus of Holdan will give Midwich the ability to provide a more comprehensive value-added service to our customers in the UK and overseas. Similarly, Midwich's vast reach into the audio visual market provides Holdan's vendors with an opportunity to expand further into a growing segment.

We are also pleased to welcome Bruce Mackay and the rest of the Wired team to the Midwich Group. The acquisition in New Zealand supports two of our key strategic objectives in the region, to provide outstanding value added support to our customers and vendors, and to continue the rapid growth of our display solutions business."

Midwich will be announcing its Interim Results for the six months ended 30 June 2016 on Tuesday 13th September 2016. A presentation to analysts will take place at 9.30 am at the offices of FTI Consulting, 200 Aldersgate, EC1A 4HD.

Enquiries:

Notes to Editors:

Midwich is a specialist AV and document solutions distributor to the trade market, with operations in the UK and Ireland, France, Germany and Australasia. The Group's long-standing relationships with over 300 vendors, including blue-chip organisations such as Samsung, LG, Epson and NEC, supports a comprehensive product portfolio across major audio visual categories such as large format displays, projectors, digital signage and printers. The Group operates as the sole or largest in-country distributor for a number of its vendors in their respective product sets. The Directors attribute this position to the Group's technical expertise, extensive product knowledge and strong customer service offering built up over a number of years. The Group has a large and diverse base of approximately 10,000 customers, most of which are professional AV integrators and IT resellers serving sectors such as corporate, education, retail, residential and hospitality. Although the Group does not sell directly to end users, it believes that the majority of its products are used by commercial and educational establishments rather than consumers.

Initially a UK only distributor, the Group now has 493 employees across the UK, Germany, France, Ireland, Australia and New Zealand, and in the six months to 30 June 2016, 36 per cent of the Group's revenues were derived from outside the UK. A core component of the Group's growth strategy is further expansion of its international operations and footprint into strategically targeted jurisdictions.

For further information, please visit www.midwichgroupplc.com