SND.L Regulatory News (SND)

14 Sep 2007 07:00

Sanderson Group PLC14 September 2007 For immediate release 14 September 2007 Sanderson Group plc: £14 million acquisition Purchase of Retail Business Solutions Group Limited - largest acquisition since flotation Sanderson Group plc ('Sanderson', 'Group'), an established provider of market-specific software and IT services to the UK multi-channel retail and commercial sectors, today announces the acquisition of Retail Business SolutionsGroup Limited ('RBS', 'Company'), for up to £14 million in cash and shares. The total initial consideration for the acquisition is £12.275 million in cash, of which £9.225 million will be funded by way of additional bank borrowing. Senior RBS management who are all continuing with the business have elected to take 468,262 new Ordinary Sanderson shares (the 'Consideration Shares') as partof their consideration. The Consideration Shares are valued at £225,000 based onthe average closing mid-market price of 48.05 pence over the ten business days preceding 13 September 2007. Application will be made to the London Stock Exchange for the Consideration Shares to be admitted to AIM. Based in Milton Keynes, RBS was formed in 1988 and is a well established provider of solutions to the retail sector. The Company markets and supports solutions which provide front and back office electronic point-of-sale systems including the highly successful Retail-J software together with a full range ofIT services. RBS employs 74 people and has approximately 200 customers throughout the UK and Ireland, including Blacks Leisure, Harrods and French Connection. Mr Richard Goodall has led the Company since 2000 and following theacquisition will continue as Managing Director of the business within Sanderson. For the twelve months ended 31 March 2007, RBS achieved revenues of £11.98 million and profit before interest and tax of £1.34 million. Gross assets were£8.73 million at 31 March 2007 and at completion the Company had cash balances of £3.5 million. Sanderson expects the acquisition to be earnings enhancing inthe first full year*. Further consideration up to a maximum of £1.5 million in cash may be payable dependent upon the achievement by RBS of certain performance targets for a period ending not later than 30 September 2008. The senior management of RBS will receive options on 600,000 shares which, subject to performance criteria being met, will be exercisable from 1 October 2010. The acquisition of RBS significantly enhances the Group's market position andthe multi-channel retail customer base will increase to over 600 clients. The enlarged Sanderson product and services portfolio will provide good opportunities for cross-selling, and the managed service capability within RBSprovides an exciting opportunity to further develop the Group. The success of RBS in gaining new clients, with recent additions including Slater Menswear and Wyevale Garden Centres, is expected to add further momentum. Commenting on the acquisition, Christopher Winn, Executive Chairman of Sanderson, said:"We are delighted to welcome Richard Goodall and his team into the Sanderson Group. This is the latest in a series of investments in our multi-channel retail division which will now account for approximately 80 per cent of the Group's revenues. We have made good progress in this active sector and the acquisition of RBS will expand our product portfolio, increase our customer base and providetrading synergies within the Group. We are confident that RBS will make a significant contribution to Sanderson in the future, providing new revenue streams and greater market opportunities. The Group is currently trading well in the second half of the year to 30 September 2007 and expects the results for the year to be in line with market expectations". Enquiries: Sanderson - Christopher Winn, Chairman 02476 555466Sanderson - Adrian Frost, Finance Director 02476 555466Sanderson - David O'Byrne, Managing Director 01709 787787 Arden Partners - Graeme Cull 0121 423 8960Winningtons Financial - Paul Vann 07768 807631 \* The statement regarding earnings enhancement should not be interpreted to meanthat earnings per share will necessarily be greater than those for the relevantpreceding financial period. Note to Editors: Sanderson Group plc floated on AIM in December 2004 at an issue price of 50p. The Group was established in 1983 and owns substantial software IPR which it develops and supplies as market-specific solutions to the multi-channel retail and commercial markets. The Group has a substantial recurring revenue stream from pre-contracted licence, support and maintenance agreements which facilitates its progressive dividend policy. Since flotation the Group has made four acquisitions, including RBS: * July 2005 - Progressive Computer Systems Limited, a provider of browser-based software solutions to retail and commercial organisations in the UK. * February 2006 - Megabyte Limited, now Sanderson Retail Systems Limited, an established owner/supplier of software for front and back office electronic point of sale systems and IT services to the retail market. * February 2007 - the trade and IPR of Elucid, a business within the K3 Groupplc, which owns, develops and markets software for use in the mail order and e-commerce sectors of the multi-channel retail market. Not for release, distribution or publication into the United States, Canada, Australia, Japan and the Republic of Ireland. This information is provided by RNS The company news service from the London Stock Exchange