PHSC Regulatory News (PHSC)

30 Aug 2012 15:00

30 August 2012 PHSC PLC ("PHSC", the "Company" or the "Group") PROPOSED ACQUISITION

The Company is pleased to announce that it has agreed non-binding heads of terms for the acquisition of B to B Links Limited ("B2B") (the "Acquisition"). B2B is a growing retail security and labelling company that provides a range of security solutions to independent and large, national retailers. Their core business is the prevention of stock loss through the use of electronic article surveillance ("EAS") designed specifically for the protection of small and vulnerable products. B2B is the recognised preferred security partner of a number of trade associations. They are one of the market leaders and specialists in the supply of EAS security tagging systems to protect perfumes, gift items and alcohol in a variety of retail outlets, including shops on board ferries operating in both UK and international waters, duty free shops in international airports and in the high street. The company also offer closed circuit television services and labelling products. B2B's unaudited financial results for the year to 31 March 2012 show revenues of GBP1,600,000 and pre-tax profits of GBP261,000.

The scheduled completion date of the Acquisition is 30 September 2012. Consideration for the Acquisition will be satisfied via a cash payment of GBP275,000 at completion, a further cash payment of GBP320,000 on the first anniversary and a final cash payment on the second anniversary of between GBP120,000 and GBP500,000 subject to B2B performance in the period since completion. On completion, the Company will also issue approximately 150,000 new ordinary shares of PHSC to the vendors of B2B, such shares to be subject to a 12 month lock-in agreement. Cash and other assets of B2B will be purchased at fair value based on the completion accounts. The total expected consideration for the Acquisition is £920,000 plus the agreed value of tangible net assets at completion.

A further announcement relating to the share issue and the Acquisition will be made in due course.

CEO Stephen King, commenting on the Acquisition, said:

"We were pleased to complete the acquisition of QCS International Limited ("QCS") at the end of July. While it is too early to make detailed comment on progress, the integration of QCS appears to be going well and QCS is expected to contribute in excess of GBP300,000 of revenues and EBITDA of approximately GBP75,000 over the remainder of this financial year.

I believe that the addition of QCS and B2B to the Group signals an exciting move away from our reliance upon traditional health and safety consulting and management services. It is worth noting that bringing these new companies on board will be achieved with only 3 per cent. share dilution. In a full year, based on current performance, QCS and B2B would generate combined revenues of more than GBP2 million and add GBP400,000 to Group EBITDA. This is a significant step forward for PHSC, which I would hope to see reflected in the returns to the Company's shareholders as we move forward with our new strategy."

For further information please contact:

PHSC plc Stephen King 01622 717700 Stephen.king@phsc.co.uk www.phsc.plc.uk Northland Capital Partners 020 7796 8800 Limited Gavin Burnell / Edward Hutton

Alice Lane (Broking)