NBI.L Regulatory News (NBI)

13 September 2013

NORTHBRIDGE INDUSTRIAL SERVICES PLC

("NORTHBRIDGE" OR THE "COMPANY")

ACQUISITION OF CRESTCHIC (ASIA-PACIFIC) PTE LIMITED

AND

PLACING OF 1,561,700 NEW ORDINARY SHARES TO RAISE £6.17 MILLION

Northbridge Industrial Services plc, the industrial services and rental company, today announces the acquisition of Crestchic (Asia-Pacific) PTE Ltd ("CAP") by its wholly owned subsidiary Northbridge Asia-Pacific and a Placing of 1,561,700 new Ordinary Shares in the Company, to raise approximately £6.17 million before expenses.

Highlights:

· Agreement for the acquisition of CAP for a maximum consideration of S$13.25 million (£6.63 million) to be funded by a combination of the Placing and the Group's cash resources.

· CAP is an independent distributor of Crestchic loadbank products. Based in Singapore, it specialises in the sale and rental of loadbanks and transformers, with customers mainly in Singapore, and also in Malaysia, China, Vietnam, Japan and Australia.

· The Acquisition will enhance Northbridge's presence in the Asia Pacific region, in which it has operated since 2011, and will also re-unify the well-recognised Crestchic brand globally within the Northbridge group.

· Placing of 1,561,700 new Ordinary Shares by Westhouse Securities Limited with new and existing institutional investors at 395 pence per share, which represents a discount of approximately 3.2 per cent. to the closing mid-market price on 12 September 2013, to raise approximately £6.17 million before expenses.

Placing Statistics

Commenting on the proposed Acquisition and the Placing, Eric Hook, Chief Executive of Northbridge said:

"On behalf of the Board, I am delighted to announce the acquisition of Crestchic (Asia-Pacific) today. The Acquisition represents a further step in the strategic growth and development of Northbridge and is in line with our strategy of acquiring specialist businesses in niche sectors which are capable of further organic growth. We have been looking to acquire CAP for a considerable time and the outcome today is an important development for Northbridge, significantly increasing our presence in the all-important Asia Pacific market.

I am also pleased to announce the completion of our successful Placing which has been strongly supported by existing and new shareholders. I would like to thank our investors for their support as we continue to grow and develop Northbridge."

These highlights should be read in conjunction with the full text of this announcement.

For further information:

ACQUISITION OF CRESTCHIC (ASIA-PACIFIC) PTE LIMITED

AND

PLACING OF 1,561,700 NEW ORDINARY SHARES TO RAISE £6.17 MILLION

1. Introduction

The Company announces that it has agreed terms for the acquisition of CAP by its wholly owned subsidiary Northbridge Asia-Pacific, for a maximum potential consideration of S$13.25 million (£6.63 million), and has raised approximately £6.17 million (before expenses) by way of a placing of 1,561,700 new Ordinary Shares at a price of 395 pence per share. The consideration payable for CAP will be satisfied by the net proceeds of the Placing along with the Group's cash resources.

CAP, which is based in Singapore, specialises in the sale and rental of loadbanks and transformers, with customers mainly in Singapore, and also in Malaysia, China, Vietnam, Japan and Australia. It also provides mobile medium voltage switchgears, low and medium voltage power cables and carries out sales and product support as well as project consulting.

The maximum consideration payable for the entire issued share capital of CAP will be S$13.25 million (£6.63 million). This is comprised of an initial consideration of S$10.75 million (£5.38 million), inclusive of a completion bonus of S$0.25 million (£0.125 million), to be satisfied in cash from the net proceeds of the Placing, and deferred consideration of up to a maximum of S$2.5 million (£1.25 million) which will be satisfied in cash from the net proceeds of the Placing and the Group's cash resources, payable by 29 November 2013.

The Placing Shares have been placed with institutional investors. Admission and dealings in the Placing Shares are expected to commence on AIM at 8.00 a.m. on 13 September 2013. Completion of the Acquisition which is conditional only on the transfer of the initial consideration is expected to occur on 16 September 2013 or shortly thereafter.

2. Background to and reasons for the Acquisition and Placing

Northbridge's strategy is to build a group of specialist industrial equipment businesses, supplying a non-cyclical customer base including utility companies, the public sector and the oil and gas industries.

The Directors believe that the Acquisition will complement Northbridge's existing businesses and is in line with the Company's stated strategy to acquire companies in specialist, niche sectors which are capable of further organic growth. The Acquisition will also re-unify the well-recognised Crestchic brand globally within the Northbridge group. CAP has been a target of Northbridge since 2006.

Through the Acquisition, Northbridge will be acquiring assets with a historical cost of over S$15 million, as stated in CAP's accounts, as at 31 March 2013, for between S$10.75 and S$13.25 million. The expansion of the Northbridge fleet through the acquisition of CAP's complementary assets will allow the Group to take on a greater number of engagements and larger scale projects.

CAP operates in the Asia Pacific market, a market that Northbridge knows well, having had a presence in the region since the establishment of Northbridge Asia-Pacific in 2011. The Acquisition will aid Northbridge in continuing to build its presence in a number of countries in which it already operates, including Singapore, Malaysia, China, Vietnam and Australia, and CAP's presence in Japan will give Northbridge access to a market in which it currently has no presence.

There are a number of pre-existing links between Northbridge and CAP, with CAP having acted as an agent to Northbridge for 18 years. Northbridge has been active in the Asia Pacific region since 2011 when Northbridge's Asia Pacific business was established in Singapore by a former CAP employee. Much of CAP's loadbank assets were purchased from Northbridge and the Company is familiar with many of CAP's customers, which should facilitate the integration of the businesses.

The net proceeds of the Placing will, in conjunction with the Group's cash resources, be used to finance the consideration and expenses payable in relation to the Acquisition. Funding the Acquisition through the Placing will help to ensure that the balance sheet remains strong for future growth.

3. Information on CAP

CAP is a specialist in loadbank and transformer rental and sales. Founded in 1994, it gained the right to use the Crestchic brand name in 1995 when it became an agent of Crestchic UK. Aside from rental and equipment sales, it performs consultancy and installation for load tests and related projects. CAP is based in Singapore with customers mainly in Singapore, and also in Malaysia, Vietnam, China, Japan and Australia.

CAP's fleet includes resistive and reactive AC loadbanks with capacity of over 150MVA; DC loadbanks of various voltages; transformers ranging from 380V to 33kV; mobile medium voltage switchgears; and low and medium voltage power cables.

Financial information

The trading record of CAP for the two years ended 31 March 2013 as extracted from CAP's financial statements is summarised below:

Rate: 1 GBP = Singapore $ 2.00

CAP's financial performance in the year to March 2012 was enhanced by an unusually large equipment sale of S$2.8 million (£1.4million). The results for 2013 reflect the development of Northbridge's presence in the Asia Pacific market place.

4. Proposed terms of the Acquisition

The maximum potential consideration payable for the entire issued share capital of CAP is S$13.25 million (£6.63 million) which includes an initial consideration of S$10.75 million (£5.38 million), inclusive of a completion bonus of S$0.25 million (£0.125 million), to be satisfied in cash from the net proceeds of the Placing and the Group's cash resources. Completion of the Acquisition which is conditional only on the transfer of the initial consideration is expected to occur on 16 September 2013 or shortly thereafter.

Of the initial consideration, an amount of S$1 million (£0.5 million) is to be placed in an escrow account, pending proof of payment in relation to an existing tax liability at which point it will be released to the vendor.

Deferred consideration will also be payable if the verification of the audited accounts of CAP, as at 10 September 2013, confirms that CAP's NAV at that date multiplied by a factor of 1.2 is greater than S$10.5 million. In this case, the deferred consideration will be equivalent to the lesser of either: CAP's NAV at 10 September 2013 multiplied by 1.2 less S$10.5 million; or S$2.5 million. If the verification of the audited accounts reveals that CAP's NAV as at 10 September 2013 multiplied by 1.2 is less than S$10.5 million, no deferred consideration will be payable. Any deferred consideration is payable within 14 days of the date of completion of such verification exercise, currently expected to be by 15 November 2013.

The net asset value of CAP as at 31 March 2013 was S$9.1 million (£4.5 million). It is expected that the Acquisition will be completed on 16 September 2013 or shortly thereafter.

5. Details of the Placing

The Company has raised £6.17 million (before expenses) through the issue of the Placing Shares at the Placing Price in order to fund the majority of the consideration payable pursuant to the Acquisition. The Placing Price represents a discount of approximately 3.2 per cent. to the closing mid-market price of 408 pence per Ordinary Share on 12 September 2013, being the last business day prior to the publication of this announcement. The Placing Shares will represent approximately 9.1 per cent. of the Enlarged Share Capital (excluding any treasury shares).

Pursuant to the terms of the Placing Agreement, Westhouse Securities, as agent for Northbridge, has procured Placees for the Placing Shares at the Placing Price.

The obligations of Westhouse Securities under the Placing Agreement are conditional, inter alia, upon Admission having occurred by 8.00 a.m. on 13 September 2013 (or such later time and/or date as may be agreed, being no later than 30 September 2013), and there being prior to Admission no material breach of the warranties given to Westhouse Securities.

Westhouse Securities may terminate the Placing Agreement in specified circumstances (including for breach of warranty at any time prior to Admission, if such breach is reasonably considered by Westhouse Securities to be material in the context of the Placing) and in the event of a force majeure event occurring at any time prior to Admission. If the conditions of the Placing Agreement are not fulfilled on or before the relevant date in the Placing Agreement, Placing monies will be returned to Placees without interest as soon as possible thereafter.

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. The Placing Shares will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive any dividend or other distribution declared, made or paid following Admission, including the interim dividend of 2p per share announced today. It is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on 13 September 2013.

6. Current trading and future prospects

Northbridge has today separately released its interim results for the six months to 30 June 2013. The results demonstrated a solid performance for the first six months of 2013 and the announcement contained a statement from Eric Hook, the Chief Executive of Northbridge, that the Company is currently on track to meet management's expectations for the year as a whole.

7. Forward-looking statements

This announcement may contain forward-looking statements relating to the Company's expected operations that are based on management's current expectations, estimates and projections. Words such as "expects", "intends", "plans", "projects", "believes", "estimates", and similar expressions are used to identify such forward-looking statements. These statements are not warranties or guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although the Company believes the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, many of which are beyond the control of the Company, which could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements.

Definitions

All references in this announcement to "£" or "p" are to the lawful currency of the United Kingdom and all references to "S$" are to the lawful currency of Singapore.

Unless otherwise stated, the following exchange rate is used throughout this announcement: £1 = S$2.00

Ends