Porvair Regulatory News (PRV)

27 Oct 2005 16:12

Porvair PLC27 October 2005 27 October 2005 PORVAIR PLC PROPOSED ACQUISITION OF OUTSTANDING MINORITY INTEREST IN PORVAIR FILTRATION GROUP LIMITED; PROPOSED VENDOR PLACING OF 3,680,000 NEW ORDINARY SHARES AT 110P PER SHARE; PROPOSED NEW EMPLOYEE SHARE OPTION SCHEME; AND NOTICE OF EXTRAORDINARY GENERAL MEETING Introduction Porvair plc ("Porvair" or the "Group") announces that it has entered into aconditional agreement to acquire the outstanding 21 per cent. of the shares inPorvair Filtration Group Limited ("PFG") which it does not already own from JohnSexton, David Amey and James Robinson (the "Vendors") for an aggregate cashconsideration of £6.25 million (the "Acquisition"). As the Vendors are alldirectors of PFG, the Acquisition is a related party transaction under theListing Rules and, accordingly, is conditional on the approval of Porvair'sshareholders. Information on PFG PFG is a specialist porous materials and filtration systems group, which designsand manufactures filters and filtration systems for demanding environments inindustries including aerospace, biosciences, chemical process, power generation,pharmaceutical, environment, food and beverage, nuclear and printing. For the year ended 30 November 2004, PFG and its subsidiaries generatedoperating profit before goodwill amortisation of £3.3 million (£2.7 millionafter charging goodwill amortisation) on turnover of £21.4 million. As at 30November 2004, it had consolidated net assets of £24.4 million. Funding Porvair proposes to fund £4.05 million of the consideration through the proceedsof a vendor placing of 3.68 million new ordinary shares at 110 pence per share(the "Vendor Placing"). Evolution Securities Limited has agreed to place the newordinary shares with institutional investors and has underwritten the VendorPlacing. The balance of the consideration and the costs of the Acquisition willbe financed through a new term loan facility. Benefits of the Acquisition PFG is a significant contributor of profits and cash flow and is core to theGroup's strategy of being a specialist filtration business with expertise inporous and microporous materials. The Acquisition will benefit the Group in thefollowing ways: • It will allow Porvair to obtain complete ownership of PFG.• It will give Porvair considerably more flexibility regarding the management of PFG.• It will ensure the continuing involvement in the PFG business of the Vendors allowing an orderly succession programme to be put in place. The Acquisition and Vendor Placing are expected to enhance Porvair's earningsper share from completion. This statement should not be interpreted to mean thatearnings per share in the first full financial year following completion, or inany subsequent period, will necessarily match or be higher than those for therelevant preceding financial period. Current trading The Group is trading in line with the Board's expectations for the currentfinancial year and the Board remains confident of the prospects of the Group.PFG has shown encouraging progress in the year to date and has fulfilled theseveral large orders anticipated in the Group's interim results for the sixmonths ended 31 May 2005. Amended unapproved employee share option scheme The Board also proposes to establish a new share option scheme under whichEnterprise Management Incentive options may be granted to qualifying employeesin the UK and incentive stock options may be granted to employees in the US.The new employee share option scheme is subject to shareholder approval at theextraordinary general meeting. Extraordinary General Meeting A circular, setting out full details of the Acquisition, the Vendor Placing andthe new employee share option scheme, together with the notice of theextraordinary general meeting, at which resolutions to approve the Acquisitionand the new employee share option scheme will be proposed, will be despatched toPorvair's shareholders later today. The extraordinary general meeting will beheld at the offices of Travers Smith, 10 Snow Hill, London EC1A 2AL at 2 p.m. on18 November 2005. Commenting on the proposed acquisition the Chief Executive, Ben Stocks, said: "The acquisition of the remaining interest in PFG is in line with our strategy.PFG is performing well and the acquisition gives Porvair increased exposure togrowing markets. Porvair continues to pursue products which have clearcommercial benefits, and its technology provides solutions to demanding globalapplications and markets." Enquiries: PorvairBen Stocks, Chief Executive +1 704 697 2411Chris Tyler, Finance Director 01553 765 500 Close BrothersAndrew Cunningham 020 7655 3100 Evolution SecuritiesSteve Roberts 020 7071 4300 Buchanan CommunicationsCharles Ryland / Ben Willey 020 7466 5000 Close Brothers Corporate Finance Limited, which is regulated in the UnitedKingdom by The Financial Services Authority, is acting exclusively for Porvairand for no one else in relation to the Acquisition and will not be responsibleto anyone other than Porvair for providing the protections afforded to customersof Close Brothers Corporate Finance Limited or for providing advice in relationto matters referred to in this announcement. Evolution Securities Limited, which is regulated in the United Kingdom by TheFinancial Services Authority, is acting exclusively for Porvair and for no oneelse in relation to the Vendor Placing and will not be responsible to anyoneother than Porvair for providing the protections afforded to customers ofEvolution Securities Limited or for providing advice in relation to mattersreferred to in this announcement. The release, publication or distribution of this announcement in certainjurisdictions may be restricted by law and therefore persons in suchjurisdictions into which this announcement is released, published or distributedshould inform themselves about and observe such restrictions. This announcement does not constitute, or form part of, an offer to sell or thesolicitation of an offer to subscribe for or buy any securities, nor thesolicitation of any vote or approval in any jurisdiction, nor shall there be anysale, issue or transfer of the securities referred to in this announcement inany jurisdiction in contravention of applicable law. These written materials are not an offer of securities for sale in the UnitedStates. Securities may not be offered or sold in the United States absentregistration under the US Securities Act of 1933 (the "US Securities Act") or anexemption therefrom. Porvair has not and does not intend to register any of theNew Ordinary Shares under the US Securities Act. The New Ordinary Shares willnot be offered or sold to the public in the United States. This information is provided by RNS The company news service from the London Stock Exchange