Last checked at 16 Jul 2012 07:00
ADVENTIS Group Plc (ATG.L)
(the "Group" or the "Company")
Sale of bChannels Limited and agreement, subject to contract,
for the sale of Second2 Limited
Adventis Group Plc announces that following the close of business on Friday 13 July 2012 it exchanged contracts, subject to shareholder approval, for the sale of the entire issued share capital of bChannels Limited ("bChannels") and has agreed terms, subject to contract and shareholder approval, for the sale of Second2 Limited ("Second2") to newly formed entities partly owned by the respective management teams of the above two companies and partly by RCapital Partners LLP ("RCapital"). bChannels and Second2 constitute the last remaining trading businesses of the Group.
As announced on 19 June 2012, an entity controlled by RCapital acquired the bank borrowings from and security rights with Lloyds TSB Bank plc and Lloyds TSB Commercial Finance Limited.
Terms of the transactions
The principal terms of each transaction are as follows:
bChannels
The Company will receive £500,000 payable in cash at completion which will be used to reduce the Group's indebtedness to RCapital in respect of the debts owed to the entity controlled by RCapital following its acquisition of certain debts previously owed by the Group and its subsidiary undertakings to Lloyds TSB Bank plc and Lloyds TSB Commercial Finance Limited ("Debts").
In addition the buyer has taken over the responsibility for payment of deferred consideration obligations of the Company to the original vendors and current management team of bChannels of £511,000 for the period up to 31 December 2011 and has agreed to assume £800,000 of the intercompany balance payable by the Company to bChannels.
The buyer will also purchase the rights to receive intercompany balances owed by bChannels to certain subsidiary undertakings of the Group for additional consideration of £44,600 payable in cash at completion.
The Company acquired bChannels in February 2010. Under the acquisition agreement, additional consideration remains payable based on reported profits for the two years to 31 December 2013. The Company carried a provision of £1.4million for the estimated value of this obligation in its draft accounts for the year ended 31 December 2011.
In the year ended 31 December 2010, the last year for which audited accounts are available, bChannels made an operating profit of £325,000 on turnover of £3,137,000. In the year ended 31st December 2011, based on draft accounts, bChannels made an operating profit of £417,000 on turnover of £3,942,000 and had net assets of £661,000, including net intercompany receivables of £875,000.
Completion of the transaction is conditional on shareholder approval.
As the sale of bChannels is to an entity in which the directors of bChannels will have an interest, it constitutes a related party transaction for the purposes of AIM Rule 13 of the AIM Rules for Companies ("the AIM Rules"). In accordance with the AIM Rules, the Directors, having consulted with the Company's nominated adviser, Westhouse Securities Limited, consider that the transaction is fair and reasonable insofar as its shareholders are concerned.
Second2
Under the terms of the agreed offer, which is subject to contract, the Company will receive £750,000 payable in cash at completion which will be used to repay the Group's indebtedness in respect of the Debts.
In addition, the Group and its remaining subsidiary undertakings will be released from their obligations as guarantor of indebtedness owed by Second2 to the entity controlled by RCapital which currently stand at approximately £0.7million.
In the year ended 31 December 2010, the last year for which audited accounts are available, Second2 made an operating profit of £742,000 on turnover of £4,424,000. In the year ended 31 December 2011, based on draft accounts, Second2 made an operating profit of £155,000 on turnover of £4,358,000 and had net assets of £1,038,000, including net intercompany receivables of £1,703,000.
Completion of the transaction is subject to contract and will be conditional upon shareholder approval and the Company obtaining the consent of the former shareholders of Second2 under the original sale agreement that was entered into by the Company when it acquired the entire issued share capital of Second2 in May 2008.
As the proposed sale of Second2 is to a company in which the directors of Second2 will have an interest, it constitutes a related party transaction for the purposes of AIM Rule 13 of the AIM Rules. In accordance with the AIM Rules, the Directors, having consulted with the Company's nominated adviser, Westhouse Securities Limited, consider that the transaction is fair and reasonable insofar as its shareholders are concerned.
Other matters
The Company announces that its wholly owned subsidiary, Gilbert Doyle Oakmont Limited has ceased to trade following completion of the sale of its business and goodwill for consideration of £10,000 in cash which was received on completion.
As anticipated in the announcement made on 13 June 2012, the Directors believe that the net proceeds from sale of the Technology division and other assets will now not be sufficient to repay in full the Company's debt and other liabilities and therefore the Directors now consider there is no value in the Company's ordinary share capital.
The suspension of the Company's shares, which commenced on 19th June 2012, continues. A further announcement will be made in due course
Enquiries:
Adventis Group Plc Tel: 01494 731600
Nick Winks, Chairman
Andy Pearson, Finance Director
Westhouse Securities Limited Tel: 020 7601 6100
Tom Griffiths