Stm Grp. Regulatory News (STM)

23 Aug 2007 07:00

STM Group PLC23 August 2007 Press Release 23 August 2007 STM Group Plc ("STM", "the Company" or "the Group") Acquisition of Parliament Corporate Services Limited STM Group Plc (AIM:STM), the cross border financial services provider, is todaypleased to announce, through its subsidiary STM Fidecs Limited, the conditionalacquisition of Parliament Corporate Services Limited and associated companies ("Parliament"), for a maximum consideration of up to £2.3 million ("theAcquisition"), subject to approval by the Gibraltar Financial ServicesCommission ("GFSC"). Set up in 2000 as a continuation of a business founded in 1989, Parliament is aprivately held corporate and trustee service provider ("CTSP") based inGibraltar providing company management and personal trust services. Parliamenthas an established client base which, as at 31 December 2006, was made up of 275companies and 115 trusts. The activities carried out by the companies managed byParliament include real estate, consultancy, marine and aircraft management andgeneral investment, and a significant majority of them are domiciled inGibraltar. In the year ended 31 December 2006, the last date to which audited accounts wereprepared, Parliament reported audited revenues of approximately £0.64 millionand a net profit of approximately £0.37 million (before group charges ofapproximately £0.08 million). Trading in Parliament in the first 6 months of2007 has been encouraging, generating unaudited revenues of approximately £0.4million and a net profit (after group charges) of £0.2 million during theperiod. As at 31 December 2006, Parliament's audited net assets wereapproximately £0.06 million. Parliament has a strong team of qualified trust and company directors andimportantly some experienced management all of whom will be quickly andseamlessly integrated into the operations of STM Fidecs, also based inGibraltar, enabling an immediate rationalisation of combined overheads. The maximum consideration of £2.3 million is payable as to 50 per cent. in cashand 50 per cent. in ordinary shares of 0.1p in the Company ("Ordinary Shares").The consideration is made up of an initial consideration of £1.725 million,payable on completion ("Initial Consideration"), and deferred consideration ofup to £0.575 million ("Deferred Consideration"), payable in cash on theachievement of certain targets over the remainder of 2007 and payable 15 monthsfrom completion. The Initial Consideration is to be satisfied as to £0.575 million in cash,payable out of STM's existing cash resources, and £1.15 million through theissue to the vendor of 1,932,773 new Ordinary Shares ("Consideration Shares") at59.5p per Ordinary Share, being the average closing mid-market price perOrdinary Share over the 10 business days immediately prior to 27 June 2007, thedate on which the heads of agreement on merging the two businesses was signed.The Consideration Shares will be subject to lock-in provisions for 15 monthsfrom completion. The Consideration Shares represent approximately 5.4 per cent. of the Company'sexisting issued ordinary share capital and, following their issue, the Companywill have 37,532,000 Ordinary Shares in issue. Accordingly, application will bemade to the London Stock Exchange for the Consideration Shares to be admitted totrading on AIM once approval has been received from the GFSC, with admission anddealings in the Consideration Shares expected to commence shortly thereafter. Commenting on the transaction, Tim Revill, Chief Executive Officer of STM GroupPlc, said: "We are delighted to be able to welcome Parliament into the STMGroup. Parliament provides an excellent complementary fit by bringing with itan established portfolio of clients, some strong management and a good pipelineof new work, all of which will be easily integrated into our existing Gibraltaroperations with little or no duplication. "We expect Parliament to be immediately earnings enhancing to the Group and itallows us to continue to develop and expand the STM Fidecs brand in Gibraltar.As previously stated, trading for the year is on track and we look forward toannouncing our maiden interim results to 30 June 2007 on 11 September 2007." - Ends - For further information, please contact:STM Group PlcTim Revill, Chief Executive Officer Tel: 00 350 51610Matt Wood, Non-executive director Tel: +44 (0) 20 7752 0215 www.stmgroupplc.com Daniel Stewart & Co. PlcLindsay Mair / Tessa Smith Tel: +44 (0) 20 7776 6550 Media enquiries:AbchurchHenry Harrison-Topham / Charlie Jack Tel: +44 (0) 20 7398 7706henry.ht@abchurch-group.com www.abchurch-group.com Notes to editors STM was formed in 2007 specifically to become a leading financial services groupoperating in the Corporate and Trustee Service Provider (CTSP) sector. TheCompany listed on the AIM market of the London Stock Exchange in March 2007.The traditional business of CTSPs is to administer and manage personal, familyand commercial assets and income streams in tax efficient offshorejurisdictions. The Company's aim is to grow through acquiring and consolidatinghigh quality existing CTSPs which offer complementary products and services andthat operate in complementary tax efficient jurisdictions to those provided bySTM's first acquisition, the Gibraltar based CTSP, Fidecs Group Limited ("Fidecs"). Fidecs is the second largest financial services firm in Gibraltar and employs 80people. It specialises in financial planning for both High Net Worthindividuals ("HNWI") moving to work, living or retiring overseas or makingcross-border investments, and for entrepreneurial, predominantly, owner-managedbusinesses, expanding into or re-locating to other, frequently lower tax,jurisdictions. It also includes an insurance management division, specialisingin providing set up and management services to newly formed insurance companiesoperating out of Gibraltar. In the year ended 31 December 2006, Fidecs reportedturnover of £5 million with post tax profit of £1.7 million. In June 2007 STM acquired the Atlas Group of companies, a privately held CTSPprovider, based in Gibraltar which has been integrated into the operations ofSTM Fidecs. The CTSP market is fragmented in nature, comprising a small number of very largeinternational financial services groups and a large number of relatively smalltrust and company management businesses regulated by, and operating out of,single offshore jurisdictions. Further information on STM Group can be found at www.stmgroupplc.com This information is provided by RNS The company news service from the London Stock Exchange