SSY.L Regulatory News (SSY)

14 Sep 2007 13:35

SciSys PLC14 September 2007 SciSys plc Acquisition of VCS AG SciSys plc ("SciSys" or "the Company"), the supplier of bespoke IT services andsolutions to blue chip clients primarily in the Space, Defence and Publicsectors, today announces the acquisition of VCS AG ("VCS") for Euro 16.7million. VCS is a supplier of bespoke IT solutions to the Broadcast and Space sectors.The Broadcast division provides integrated IT systems for the production andplayout process of radio, TV and new media for both German domestic andinternational professional broadcasters. Solutions are built around VCS'sfamily of niche software products which provide ongoing support and maintenanceincome. The Space sector supplies framework-based ICT system solutions andcomponents/applications for satellite meteorology to European and German spaceagencies. Established in 1986, VCS employs 140 staff from its base in Bochum,Germany. The consideration for the acquisition of Euro 16.7 million is being satisfied bythe issue of 2,822,366 new ordinary SciSys shares (valued at Euro 2.4 millionbased on the average closing middle market price of a SciSys ordinary share overthe 5 business days preceding 11 September 2007) and Euro 14.3 million in cash.The cash consideration is being funded from existing resources, supplemented byextended overdraft facilities of £2.0 million and a bank loan of £3.7 million.In December 2007 the Company will receive a loan repayment from the SciSysemployee share trust of £2.2 million which will be applied to reduce the bankloan. The shareholders in VCS are Prof Dr K G Meng and WestLB, who hold 65.7% and29.7% respectively. The balance of 4.6% is held as own shares by VCS. Theconsideration for the shares held by Prof Dr K G Meng, VCS's founder andmajority shareholder, will be satisfied by the issue of 2,822,366 new ordinaryshares, subject to their admission to trading on AIM, with the remainder of Euro9.1 million being satisfied in cash. He will continue to work part time in thebusiness to facilitate a smooth integration and is not permitted to sell hisSciSys shares before the second anniversary of the acquisition date. Theconsideration for the shares held by WestLB (Euro 5.2 million) will be satisfiedcompletely with cash. In the twelve months to 31 December 2006, (under US GAAP) VCS achieved revenueof Euro 16.0 million (2005: Euro 12.6 million) and profit before tax of Euro 2.5million (2005: Euro 2.2 million). It had gross assets of Euro 12.2 million asat 31 December 2006, including net cash expected to be in excess of Euro 2million at the time of completion. SciSys expects the acquisition will beimmediately earnings enhancing for the SciSys group. The acquisition is in line with SciSys' stated strategy of using its cash assetsto enhance earnings per share through organic growth and strategic acquisition;to broaden access to markets both geographically and vertically and to enhancemargins by developing and leveraging its IP assets and the reuse of software. In relation to the issuance of shares above, application has been made to theLondon Stock Exchange for the 2,822,366 new ordinary shares to be admitted toAIM and it is expected that admission will take place on 20 September 2007. Thenew ordinary shares will rank pari passu with the existing shares of theCompany. Following the issue of new shares in relation to this acquisition, the totalissued share capital of the Company has increased to 28,480,275 ordinary shares. Commenting, Mark Hampson, Chief Executive of SciSys, said, "I am delighted to welcome VCS to the SciSys Group. There is a strong cultural and technological compatibility between the twobusinesses. Both are projects-based companies with a well established blue chipclient base with substantial elements of repeat business. We have known VCS for many years and have been working closely together for thelast year. By integrating the two businesses, SciSys will enjoy greater accessto the Broadcast sector, a stronger presence in mainland Europe and improvingmargins in our activities." Contacts Mark Hampson, Chief Executive 01249 466 466SciSys Plc Chris Cheetham, Finance Director 01249 466 466SciSys Plc Simon Bridges & Ian Dighe 020 7426 9000Landsbanki Tom Cooper 020 7256 9445Winningtons Financial PR This information is provided by RNS The company news service from the London Stock Exchange