TPG.L Regulatory News (TPG)

25 August 2020

TP Group plc

("TP Group", "the "Company" or the "Group")

Acquisition of Osprey Consulting Services Ltd.

TP Group (AIM: TPG), the providers of mission-critical solutions for a more secure world, is pleased to announce the acquisition of the entire issued share capital of Osprey Consulting Services Ltd. ("Osprey") for a maximum cash consideration of £3.5 million, on a debt-free, cash-free, normalised working capital basis (the "Acquisition").

Osprey is a privately-owned consultancy company whose business centres around safety and mission critical air space management and regulation in the defence, space and the emerging urban air mobility markets.

An initial consideration of £2.25 million has been paid on acquisition, with an additional £1.25 million payable at the end of year one, subject to completion of certain transition activities by the vendors.

The Acquisition is expected to be earnings accretive to the Group for the year ending 31 December 2021 and will be funded from existing cash facilities.

Acquisition rationale

The Acquisition will bring substantial market presence in both the military and civil aerospace sectors and growth potential in the management of unmanned aircraft, aerial activities around renewable energy installations and a growing space launch capability in the UK.

Synergies provide a strong platform for future value:

· Osprey is complementary to TP Group delivering specialist consulting and software services to the highly regulated and safety-critical civil and military aerospace markets

o Osprey's customer base is complementary to TP Group's existing relationships in the defence industry

o Osprey is working on control of airspace for unmanned aircraft which is aligned with TP Group's activities in autonomous routing technologies

o Osprey is engaged in work on the Scottish spaceport and will add to the mission support services currently delivered elsewhere in Europe by TP Group's subsidiary, Sapienza Consulting

· Significant cross selling opportunities are expected to arise for other Group services and solutions to the aerospace sector and for Osprey services across the Group's international footprint

· The Osprey business will be fully integrated into the Group and will contribute to the existing Consulting value stream

About Osprey 

Osprey was founded in 2006 and has 40 consultants operating from offices in Bristol, Lincoln, Farnborough and Northallerton (Yorkshire).

The business is equally split between military and civilian aerospace, and whilst Osprey does business with international customers, all revenues are currently derived from the UK. This presents an opportunity for future growth as part of an international Group.

In the financial year ended 31 December 2019, Osprey reported adjusted EBITDA of £0.6 million from revenues of £4.6 million and as at 31 December 2019 had unaudited consolidated gross assets of £1.4 million.

Phil Cartmell, Chief Executive Officer of TP Group, commented:

"We are delighted to welcome Osprey into the Group and believe their team is highly complementary to our existing business. This transaction extends our presence and capabilities in the military and civil aerospace sectors, providing the enlarged group with additional growth opportunities in the UK and internationally. Safety management of airspace will continue to be of paramount importance despite the reduction in flight volumes brought about by COVID-19, and Osprey make a key contribution in this field.

We are also excited by Osprey's innovation potential as new markets open up in the management of airspace regulations, particularly around renewable energy installations and the government's support of space launch facilities in the UK. Osprey are involved in both of these areas and will complement our consulting activities in the space industry alongside Sapienza Consulting. We look forward to working with them to capitalise on these opportunities.

The combination of the two businesses presents a compelling opportunity for future success."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, please contact:

Notes to Editors

TP Group delivers complex equipment, software and services for mission, business and safety critical applications in the defence, space and energy sectors. With more than 400 people in 6 European countries, it serves global customers through long-term contracts. The Group's shares have been traded on AIM since July 2001.