Oakley Regulatory News (OCI)

14 Mar 2008 14:13

Oakley Capital Investments Limited14 March 2008 14 March 2008 Oakley Capital Investments Limited (the "Company") FREEDOM4 Communications plc (formerly known as Pipex Communications plc) ("FREEDOM4") today announced that it has entered into a conditional agreement forthe sale of its Hosting and Network Services Division (the "Division") to HostEurope WVS Limited (a newly formed wholly owned subsidiary of Oakley CapitalPrivate Equity L.P. (the "Oakley L.P.")), for an Enterprise Value of £120million. The £120 million purchase price will be satisfied as to £20 million invendor loan notes (to be issued by a wholly owned subsidiary of the OakleyL.P.), the assumption of approximately £10 million in debt and the balance incash. Completion of this sale is subject, inter alia, to the approval of theFREEDOM4 shareholders at a general meeting which is convened for 9.00 am on 1April 2008. The cash element of the £120 million consideration payable by the Oakley L.P.for the Division will be satisfied by funds managed by Oakley Capital (Bermuda)Limited which have been committed to the Oakley L.P., and debt from Bank ofScotland Corporate. Approximately £50 million will be contributed by theCompany, in the form of equity, drawn down by the Oakley L.P., and through asecured mezzanine instrument. The Division is a leading provider of hosting and domain names in the UK and ofhosting in Germany. Trading as 123-Reg and Webfusion, the Division is the UK'slargest domain registrar, offering easy-to-use, high quality, cost-effectiveproducts to consumers, hobbyists and businesses. In Germany, the Divisiontrades under the name Host Europe. In network services, the Division's VialtusSolutions business (formerly Pipex Business Services) provides integratedcommunications solutions to large organisations and mid-market companies. Witha focus on using IP technologies, Vialtus Solutions' products include managedhosting, mobile worker and remote office security solutions, voice services andIP networking. For the year ended 31 December 2007, the Division generated revenues of £72.3million (2006: £61.3 million), an EBITDA of £7.7 million (2006: £8.3 million)and a loss before tax, excluding amortisation of goodwill, inter-companyinterest and impairments of £0.75 million (2006: loss £0.4 million). As at 31December 2007, the net tangible assets of the Division, excluding intangibles,investments and inter-company balances were £32.7 million (2006: £11.2 million).As at 31 December 2007, the Division had approximately 386,000 hostingcustomers (2006: 331,000). For further information please contact: Oakley Capital Investments Limited 020 7766 6900Peter Dubens (Director) Collins Stewart Europe Limited 020 7523 8350Helen Goldsmith Notes The Company has been set up to invest primarily in Oakley L.P., a private equityfund established by a team of experienced investment professionals led by PeterDubens, executive chairman of FREEDOM4 and former chairman of 365 Media Groupplc. Peter Dubens, a director of the Company, is also on the investment committee ofthe Oakley L.P. (which committee is responsible for making the investmentdecisions) and has personally committed €15 million to the first closing of theOakley L.P.. Peter Dubens has participated in discussions of the investmentcommittee of the Oakley L.P. as to whether it acquires the Division. However,Peter Dubens has not taken part in FREEDOM4's decision to sell the Division.Peter Dubens holds no shares in the Company. The Oakley L.P. will invest primarily in mid-market buy-outs in the UK andEurope. It will seek to acquire controlling positions in companies with scopefor performance improvement, and in industries with strong underlying growthdrivers and the potential for consolidation. The Oakley L.P. will utilise theinvestment advisory team's proven ability to self-source transactions andactively manage portfolio companies to improve operational performance. TheOakley L.P. will target equity transactions in the range of €30 million to €140million and will seek to deliver gross IRR on its investments in excess of 25per cent. per annum and a blended gross multiple of three times. This information is provided by RNS The company news service from the London Stock Exchange