Northgate Regulatory News (NTG)

31 Jan 2006 07:02

Northgate PLC31 January 2006 31 January 2006 NORTHGATE PLC ("Northgate") ACQUISITION OF ARRIVA VEHICLE RENTAL LIMITED ("AVR" or the "Company") NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN THIS IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN Introduction Northgate, the UK's leading specialist in light commercial vehicle hire,announces that it has entered into an agreement with Arriva Plc ("Arriva") toacquire from a subsidiary of Arriva the entire issued share capital of AVR, aprominent UK commercial vehicle hire company, together with certain propertiesoccupied by AVR but owned by other members of the Arriva Group. Northgate hasalso announced today that it is placing 6,050,000 new ordinary shares of fivepence each (representing approximately 9.4% of Northgate's issued share capital)(the "Placing") to fund payment of the consideration in connection with theacquisition. Completion of the acquisition is conditional upon the Placingbecoming wholly unconditional and is expected to take place on 3 February 2006.Further details about the Placing are contained in the separate announcementmade by Northgate today. Information on AVR AVR is one of the major UK vehicle rental providers. The Company operatesthrough 33 branches in the UK in the light commercial vehicle, heavy commercialvehicle and car rental markets. It has a fleet of over 11,000 vehicles. For the year ended 31 December 2004 (the last year for which audited accountsare available) AVR reported profit before interest, tax and amortisation of£12.5million and at 31 December 2004 had gross assets of £167.8million and netdebt of £100.5million. Details of the Acquisition The consideration for the existing issued share capital of AVR is £53.9million,of which £49.7million is payable in cash at completion with the balance becomingpayable on 30 June 2006. In addition, Northgate will procure the repayment ofapproximately £106million of net debt owed by AVR and its subsidiaries toexternal banks and will receive £30.6million from Arriva as settlement ofintercompany indebtedness (net of the consideration for other Arrivaproperties). The consideration will be subject to adjustment by reference to anet assets statement as at 31 December 2005. The net amount payable of £129.3million will be satisfied by way of a placing of6,050,000 new ordinary shares in Northgate, the terms of which have also beenannounced today, with the balance payable in cash, funded from Northgate'sexisting bank facilities. Effects of the Acquisition The acquisition of AVR builds on Northgate's existing position of leadership inthe UK market, in line with Northgate's strategic plan, and will create a lightcommercial vehicle fleet, once integrated, in excess of 62,000 vehicles, whileat the same time providing wider coverage of the UK market. The acquisition is expected to be earnings enhancing in the first full yearfollowing completion, primarily as a result of purchasing synergies andoperational gearing benefits arising from the enlarged business. Current trading Following the announcement of Northgate's interim results to 31 October 2005 on10 January 2006, the Board of Northgate confirms that there has been no changeto the current trading and outlook of Northgate. Commenting on the acquisition of AVR, Martin Ballinger, Chairman of Northgatesaid: "We are delighted to announce the acquisition of Arriva Vehicle Rental whichsignificantly expands our UK rental operations building on our strategy outlinedin the recent interim results. This acquisition will enable Northgate to improvecustomer service through wider UK coverage and at the same time derive benefitsfrom the economies of scale generated by the enlarged business." For further information, please contact: Northgate plc 01325 467 558Steve Smith, Chief ExecutiveGerard Murray, Finance Director Hoare Govett LimitedCorporate BrokingAndrew Foster / Bertie Whitehead 020 7678 8000Corporate FinanceJulian Goodwin / Stephen Bowler 020 7678 8000SyndicateJohn MacGowan 020 7678 1084 Hogarth Partnership Limited 020 7357 9477Andrew JaquesBarnaby Fry Notes for Editors Northgate plc rents light commercial vehicles and sells a range of fleetproducts to businesses via a network of hire companies. Their NORFLEX productgives businesses access to a flexible method to acquire as many commercialvehicles as they require. Further information regarding Northgate plc can be found on the company'website: http://www.northgateplc.com Arriva Vehicle Rental As at 30 June 2005, AVR had a fleet of 11,769 vehicles, of which 8,616 werelight commercial vehicles, 485 heavy commercial vehicles and 2,668 cars. AVR employs 655 employees, of whom 140 are part-time employees Further information on AVR can be found at www.arrivarental.co.uk This announcement is for information purpose only and does not constitute anoffer or invitation to acquire or dispose of any securities or investment advicein any jurisdiction. This written announcement is not an offer of securities for sale in the UnitedStates. The new Ordinary Shares may not be offered or sold in the United Statesabsent registration under the US Securities Act of 1933, as amended (the "USSecurities Act") or an exemption therefrom. Northgate plc has not and does notintend to register any securities under the US Securities Act and does notintend to offer any securities to the public in the United States. No money,securities or other consideration from any person inside the United States isbeing solicited and, if sent in response to the information contained in thisannouncement, will not be accepted. The new Ordinary Shares have not been andwill not be registered with any regulatory authority of any state within theUnited States This information is provided by RNS The company news service from the London Stock Exchange