PFO.L Regulatory News (PFO)

25 Jul 2006 12:19

VTR PLC25 July 2006 VTR plc Acquisition of Clear (Post Production) Limited Further to the announcement dated 29 June 2006 that VTR plc ("VTR") was inadvanced negotiations to acquire Clear (Post Production) Limited ("Clear"), theDirectors are pleased to announce that VTR has today completed (subject only toadmission of the consideration shares referred to below) the acquisition of theentire share capital of Clear (the "Acquisition"). Clear is an award-winning digital visual effects and CG animation studio,specialising primarily in the commercials market. Following the acquisition,Clear will relocate from its current premises in London, where the lease hasended, to VTR's premises at 37 Dean Street, maintaining its name and image, andplaying a key role in the new expanded facility. The Board believes that the addition of Clear will enhance and strengthen thebusiness of the VTR Group and will enable it to compete better in the highermargin commercials sector of VTR's market, particularly in the field of digitalvisual effects. The consideration for the Acquisition is a payment in cash of £300,000 and theissue of 2,001,675 new VTR ordinary shares (the "Consideration Shares") to thevendors of Clear (the "Vendors"). The cash payment will be satisfied from theproceeds of a placing of 1,224,490 new VTR ordinary shares at a price of 24.5pence per share with Prime Focus Limited ("PFL"). PFL has separately guaranteed to the Vendors that VTR's ordinary shares willhave a mean closing bid price of not less than 60 pence per share over the threemonth period ending on 25 July 2008, being two years from completion of theAcquisition (the "Guarantee"). Should the mean closing bid price be less than 60pence per share, PFL will, without recourse to VTR, pay the difference to theVendors. VTR will, in return for the Guarantee, and subject to approval of itsshareholders in general meeting, issue 1,225,000 new VTR ordinary shares to PFL. Application has been made for 3,226,165 new VTR ordinary shares to be admittedto trading on AIM and it is anticipated that admission will become effective andthat dealings will commence on 26 July 2006. Following the Acquisition and thetransactions above (excluding the issue of the Guarantee shares), there will be27,756,276 ordinary shares in issue and PFL will be the beneficial owner of14,716,001 Ordinary Shares representing 53% of the enlarged VTR share capital.A further application will be made in due course in relation to the ordinaryshares to be issued pursuant to the Guarantee. Each of the Vendors (save for ACC Industries Limited) has undertaken to retainat least two thirds of their Consideration Shares until 25 July 2007, being oneyear from completion of the Acquisition, and at least one third of theirConsideration Shares until 25 July 2008, being two years from completion of theAcquisition. ACC Industries Limited will receive 700,700 of the ConsiderationShares representing 2.4 per cent. of the enlarged issued share capital. Further information on Clear Clear is an independent visual effects company catering for the advertising,music video, feature film and broadcast industries from its home in the heart ofLondon's Soho. Clear is equipped with a full complement of visual effects and animation toolsto suit all kinds of projects - with kit including Infernos, Flames, Smoke,Shake for 2D compositing and a 3D department working with the latest in CGItechnology, Clear has built a reputation for producing innovative and memorablework - from the small to the silver screen. Further information on Clear can be found on its website, www.clearpost.co.uk Financial information on Clear Detailed below is the performance of Clear (Post Production) Limited for the 10months since incorporation to 30 April 2006, based on unaudited managementaccounts. Profit and loss account £000 Sales 2,509Direct cost of sales (298) ----------Gross profit 2,211Administration expenses (1,827) ----------Profit before formation costs, interest and tax 384Bank interest and charges (53)Formation costs written off (153) ----------Profit before tax 178 Balance sheet as at 30 April 2006 £000 Fixed assets 283 Net current liabilities (82)Long term liabilities (23) ----------Net Assets 178 Share capital 1Profit and loss account 177 ---------- 178 ---------- Following the Acquisition, Clear will change its year to that of VTR, which is31 August. Commenting on the acquisition of Clear, Namit Malhotra, non-executive chairmanof VTR said, "The acquisition of Clear brings to VTR a well rounded group of creativecapability which complements the infrastructure strength of the VTR group. Thiswill enable the provision of a more integrated service to clients as well asachieving synergies through cost rationalisation. We firmly believe that acombination of the two entities will form a creatively superior and moreprofitable business." Simon Huhtala, Managing Director of Clear further commented, "This is a really exciting development for our staff and all of our clients bothfrom VTR PLC and Clear. VTR has an extremely strong creative heritage with anenviable technical infrastructure. We've made no attempt to hide our ambitionsto provide a more complete service for some time now and the discussions we hadwith Namit and his team illustrated some real synergies. Collectively we nowhave the necessary capital and strategic resources to grow in new directions." Langham Capital was the financial adviser to Clear. 25 July 2006 Enquiries: Paul Tracey Simon HuhtalaManaging DirectorVTR plc Managing Director020 7437 0026 Clear (Post Production) Limited 020 7734 5557Philip DaviesCharles Stanley Securities020 7953 6457 This information is provided by RNS The company news service from the London Stock Exchange