Servoca Regulatory News (SVCA)

31 Mar 2008 09:16

Servoca PLC31 March 2008 Servoca Plc ("Servoca" or "the Company") 31 March 2008 Acquisition of Education Business Servoca Plc, which provides specialist outsourced and recruitment solutions topolice forces, local and national government and companies throughout theprivate sector and in healthcare and education, is pleased to announce that ithas acquired the entire issued share capital of Academics Holdings Limited("AHL") and its wholly-owned subsidiary, Academics Limited ("AL"). AL and AHLare together referred to as "Academics". Details on Academics Academics trades from one location in Gants Hill, Essex and operates as anEducation, recruitment and training provider which supplies qualified teacherson a contract or permanent basis to clients in London and the Home Counties.Academics has a total staff of 21. In the audited accounts for the year to 31August 2007, Academics achieved a profit before tax of £910,000 on turnover of£9.04 million. At 31 August 2007, Academics had audited net assets ofapproximately £1.7million. On completion of the acquisition it is anticipatedthat there will be net assets of at least £325k. Emma Sugarman, who is thefounding director of Academics, has agreed to remain with the business for atleast 12 months under a new service agreement. Terms of the acquisition Servoca will pay an aggregate initial consideration of £2 million payable incash, subject to a net asset adjustment. There may be a further payment of up to£5 million dependent on certain EBITDA targets being achieved by Academics. Ifpaid in full, the deferred consideration will comprise £2.35million in cash, andup to £2.65 million in ordinary shares in Servoca. Any ordinary shares to beissued as deferred consideration will be issued at the then share price, butwill not be issued at less than 35 pence per share. The Directors believe that the acquisition will be earnings enhancing and willallow the Group to further develop its operations in the education sector aswell as providing an additional service offering to Servoca's existing clientbase within the education division. Funding Servoca has secured a three year term loan from The Royal Bank of Scotland Plcof £2 million to fund the initial consideration. The balance of any initialconsideration in excess of £2 million attributable to the net asset adjustmentreferred to above will be paid from existing resources. Commenting on the acquisition, Darren Browne Chief Executive said: "We are delighted to have completed our first acquisition in the educationsector. The acquisition of AHL will allow Servoca to provide wider serviceofferings to our existing client base as well as gaining an entry into themarkets which are not extensively serviced by the Group. In addition to Academics being an excellent provider of recruitment services tothe education sector, it also has a first class reputation for providingtraining to its teachers. Servoca will benefit from this capability within ourexisting training divisions, as we continue to up skill our workforce andprovide our clients with the best resource available. We are pleased to welcome AHL to Servoca and its Managing Director Emma Sugarmanto our senior management team. We look forward to working with Academics and itsemployees to help develop the business to achieve its full potential as anational provider of recruitment and training solutions to the educationsector." Contacts: Servoca PlcDarren Browne 020 7747 3030 FinnCap, nominated adviser and brokerGeoff Nash 020 7600 1658 With effect from 1 March 2008 JMFinn Capital Markets Limited conducts businessunder the trading name of FinnCap This information is provided by RNS The company news service from the London Stock Exchange