SpaceandPeople Regulatory News (SAL)

SpaceandPeople plc ("SpaceandPeople" or the "Company")

 Proposed acquisition of Retail Profile Holdings Limited

SpaceandPeople (AIM: SAL), the experiential marketing location and media sales group is pleased to announce that it has conditionally agreed to acquire the entire issued share capital of Retail Profile Holdings Limited ("RPH"), the holding company of Retail Profile Europe Limited ("Retail Profile") for £6.3 million (the "Acquisition").

The consideration payable comprises the issue of 5,824,000 ordinary shares, £1.53 million floating rate loan notes and £1.128 million cash to be financed through the placing of 1,935,484 shares at 62 pence per share (the "Placing").

Retail Profile is one of the UK's leading operators of Retail Merchandising Units ("RMUs") and draws on relationships with more than 500 merchants who trade from RMUs in over 34 shopping centres. Retail Profile was incorporated in 2004 and currently owns and operates over 200 RMUs in the UK and has also successfully established operations in Russia under a long term franchise agreement with Retail Profile Russia. Retail Profile Russia has established itself as a leading operator in Russia with over 200 units across 13 MEGA shopping centres from Moscow to Novosibersk operated by MEGA, one of Russia's leading mall operators.

The audited statutory accounts of Retail Profile (formerly called Amery Holdings III (RPEL) Limited) for the year ended 31 December 2009 showed revenues of £5.1 million generating profits before taxation of £0.5 million and had net assets of £0.9 million at 31 December 2009.

The Directors believe that the acquisition has a compelling strategic and financial rationale and provides an attractive opportunity to accelerate further growth. Key benefits arising from the acquisition include:

·; Earnings enhancing: The Directors are of the opinion that the Acquisition will be earnings enhancing and that the synergistic benefits will lead to further improvement in the performance of the enlarged group;

·; UK business development: UK property-owners are increasingly seeking a single provider for both RMUs and promotions. In anticipation of the Acquisition, the directors of both companies are pleased that their respective businesses are working side-by-side to seek to deliver a coordinated approach to various shopping centre groups in the UK and in Germany, which, although in their early stages, are already being well received;

·; Significant international opportunities: The geographic orientation of the respective companies' operations will complement one another. SpaceandPeople's operations are expanding in Germany and India. Retail Profile has a successful and growing franchise business in Russia. The Directors expect to be able to generate significant growth by delivering both RMU solutions to SpaceandPeople's international clients and promotional solutions to Retail Profile's international relationships;

·; Increased demand and improved pricing and margins: SpaceandPeople has a large outbound call centre specialising in sales of shopping centre promotions. The Company expects that this will be able to support further business growth for Retail Profile's field-based leasing representatives. Promotional and RMU activities have historically sometimes competed for the same revenues in some centres, but, as a single provider, it is expected that the enlarged group will be better able to coordinate overall pricing, margin and yield per revenue opportunity. Retail Profile has a solid financial track record with a customer and merchant base that should support continued revenue growth; and

·; Expansion of expertise: The skills and knowledge base of Retail Profile will be complementary to SpaceandPeople's promotional operations.

SpaceandPeople's expertise in experiential marketing solutions combined with Retail Profile's strengths in retail solutions creates an excellent platform to drive revenue synergies. As a result of the complementary nature of the businesses, the Directors do not anticipate any headcount reductions and minimal cost savings following the acquisition, but intend to invest further resources in order to accelerate growth.

The Acquisition and the Placing are conditional upon, inter alia, the placing agreement between the Company and Seymour Pierce Limited becoming unconditional and not being terminated and the admission of the placing shares to AIM ("Admission"). Application will be made for the 1,935,484 placing shares and 5,824,000 consideration shares to be admitted to AIM and it is expected that dealings in the shares will commence on 24 May 2010. Upon Admission, the placing shares will rank pari passu in all respects with the existing ordinary shares in issue. Following Admission, the total number of ordinary shares in the Company with voting rights in issue will be 19,416,063.

Upon completion of the Acquisition, Martin Kemp, Managing Director of Retail Profile, and Maurice Helfgott, Chairman of Retail Profile, will join the Board of SpaceandPeople as Director of Retail and as a non-executive director respectively. Julia Langkraehr, the founder of Retail Profile will continue as Retail Profile's International Development Director.

Matthew Bending, Chief Executive of SpaceandPeople commented: "This acquisition is the cornerstone for the future development of the Company, a complementary product offering, a great team; the combined group's growth potential is significantly enhanced."

Martin Kemp, Managing Director of Retail Profile commented: "We are delighted to be joining forces with Matthew and the team at SpaceandPeople. In the time we have worked together so far, we have already seen many opportunities and are very excited about the future growth prospects for the combined businesses."

Director shareholdings

Following Admission of the placing shares, the share interests of the Directors and their families will be as follows:

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Contact details

About SpaceandPeople plc

The Company facilitates and manages promotional space for marketing campaigns in shopping centres and other high footfall locations, such as theme parks and airports. Clients include world leading brands such as BT, Hilton, Coca-Cola, Orange, Mazda, Gillette, Siemens, Smirnoff and Pepsi. SpaceandPeople is at the forefront of developing the concept of space as an advertising and promotional medium. It offers consumer brands the opportunity to promote their products through direct engagement with consumers through a mix of experiential marketing events and complementary above the line advertising and multimedia campaigns. SpaceandPeople offers a comprehensive service covering brokerage, consultancy and venue centric media buying. SpaceandPeople is independently funded and its shares are admitted to trading on AIM.