Last checked at 13 Jun 2008 11:16
Tribal Group plc
Acquisition of HELM Corporation
Tribal Group plc ("Tribal" or the "Group"), a leading provider of consultancy, support and delivery services to the public sector, is pleased to announce the acquisition of a majority equity stake in The HELM Corporation Limited ("HELM") for £15.1m.
HELM is a leading consulting business providing management and financial consultancy services to the public sector in the UK and internationally. The business is based in Northern Ireland and has been established for over 17 years. It employs 82 staff and works with approximately 95 active associates.
The acquisition represents an important step in Tribal's strategy of growing its business internationally, developing its UK consultancy offering and increasing the levels of committed income. Approximately 60% of HELM's revenue is generated outside the UK and the company is currently undertaking assignments in the Republic of Ireland, Europe, Asia and Africa. In the UK, HELM works with a range of local and central government clients in England, Scotland and Northern Ireland.
Much of HELM's international work is associated with long-term development projects that provide high levels of revenue visibility. For the remainder of 2008, over 85% of the company's planned revenue is already committed and, for 2009, the equivalent figure is 45%.
HELM will form a new practice area within Tribal's existing consultancy business. HELM's expertise in finance, audit and governance will enhance and complement Tribal's current consulting offering, whilst its overseas experience and strong relationships with major international donor organisations, such as the World Bank, EU and the Department for International Development, will open up new markets for Tribal's existing services.
The senior management team will all remain with the business and retain a significant minority interest in the equity of HELM.
HELM has demonstrated strong growth in recent years. In the unaudited management accounts for the year ended 31 March 2008, HELM had gross assets of £7.9m and achieved normalised operating profit of £3.4m on turnover of £14.7m.
Tribal has purchased 72% of the issued share capital of HELM from its senior management team for a total consideration of £15.1m to be satisfied by:
£11.8m in cash; and
the issue of 2,507,582 new ordinary shares of 5p each in Tribal ("New Tribal Shares").
Further consideration of £1.6m (to be satisfied in cash) will be paid to reflect HELM's surplus cash balances at completion.
Tribal plans to invest approximately £300,000 over the coming months in integration and developing HELM's infrastructure and systems but the acquisition is nevertheless expected to be earnings enhancing in the current financial year to 31 December 2008.
Tribal has entered into an agreement with the HELM shareholders that allows for Tribal to acquire from 2011 the outstanding shares in HELM on the basis of a pre-agreed price formula. The consideration for acquiring the minority interest will be cash or, at Tribal's option, 60% in cash and 40% in new Tribal shares.
Application will be made for the admission of the New Tribal Shares to trading on the Main Market of The London Stock Exchange ("Main Market"). It is expected that the New Tribal Shares will commence trading on the Main Market on 19 June 2008. The New Tribal Shares will rank pari passu in all respects with the existing ordinary shares of 5p each in Tribal.
In order to retain financial flexibility and in the light of a growing range of opportunities available to the Group, the board of Tribal has decided not to initiate share buy-backs at the current time but to keep the matter under regular review.
Commenting on the acquisition of HELM, Peter Martin, Chief Executive of Tribal, said:
"We are delighted that HELM has decided to join Tribal. It complements our consulting offering in the UK and provides a platform for Tribal's planned international expansion.
"HELM is a high quality business run by an excellent management team and there is a strong cultural fit with Tribal's focus on improving the delivery of public services and working in partnership with our clients."
End
For further information, please contact:
Tribal Group plc Telephone: 020 7323 7110
Peter Martin, Chief Executive
Simon Lawton, Group Finance Director
Maitland Telephone: 020 7379 5151
Colin Browne
Anthony Silverman
Editors' note:
Tribal provides a range of consultancy, support and delivery services focused on improving the delivery of public services in the UK. Our core markets are in education, health, housing and regeneration, central government and local government. Tribal employs approximately 2,000 staff and its shares are quoted on the London Stock Exchange (TRB).
In the last set of audited statutory accounts for the year ended 31 March 2007, HELM delivered turnover of £11.4m, operating profit of £0.8m and had gross assets of £5.8m.
Links: Tribal Group plc website: www.tribalgroup.co.uk
This Statement has been prepared for and is addressed only to our shareholders as a whole and should not be relied on by any other party or for any other purpose. Tribal, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed.
This Statement may contain forward-looking statements. Any forward-looking statement has been made by the directors in good faith based on the information available to them up to the time of approval of this Statement and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information. To the extent that this Statement contains any statement dealing with any time after the date of its preparation, such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur and therefore the facts stated and views expressed may change. Tribal undertakes no obligation to update these forward-looking statements.