Last checked at 3 Jul 2009 14:00
| Press Release | 3 July 2009 |
Volvere plc
("Volvere" or the "Group")
Disposal of Sira Certification
Volvere plc (AIM:VLE), the turnaround investment company, is pleased to announce the disposal of Sira Certification Service, Sira Test and Certification Limited, Sira Consulting Limited and Sira Environmental Limited (together "Sira Certification") to CSA Certification (UK) Ltd, a wholly-owned subsidiary of the Canadian-based CSA Group ("CSA") for a maximum cash consideration of £8.6 million.
Highlights
| Initial cash consideration of £8 million ("Initial Consideration") | |
| Deferred cash consideration of a further £0.6 million dependent upon the achievement of certain financial targets by Sira Certification in 2009 and 2010 | |
| At Completion, net of costs and other expenses the Group will have cash and marketable securities of approximately £20 million to invest in accordance with its investing policy; and | |
| At Completion, Volvere will have net assets per share of approximately £3.20 representing a considerable premium to the Group's current share price |
Commenting on the successful disposal, Jonathan Lander, CEO of Volvere plc, said: "We have been delighted with the performance of Sira Certification since we acquired the business in September 2005. Its acquisition by such a respected organisation as CSA Group is testament to the hard work of management and staff. Under CSA Group ownership Sira Certification has a fantastic future and will present enhanced opportunities for the business, its staff and its clients.
"Following the disposal of Sira Certification, Volvere is in an extremely strong position with cashresources of approximately £20 million available for re-investment. The Group's investment strategy of selecting distressed businesses with considerable turnaround opportunity remains core to our proposition. We continue to review the numerous investment opportunities in the private and public company markets and we remain committed to delivering shareholder value."
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For further information:
| Volvere plc | |
| Jonathan Lander, CEO | Tel: +44 (0) 20 7979 7596 |
|
| www.volvere.co.uk |
| Arbuthnot Securities Limited | |
| Nick Tulloch / Ed Gay, Corporate Finance | Tel: +44 (0) 20 7012 2000 |
| edwardgay@arbuthnot.co.uk | www.arbuthnot.co.uk |
Media enquiries:
| Abchurch | |
| Henry Harrison-Topham / Jack Ballantyne | Tel: +44 (0) 20 7398 7714 |
| jack.ballantyne@abchurch-group.com | www.abchurch-group.com |
Background and reason for disposal
Sira Certification principally certifies products that are used in potentially explosive atmospheres and environmentally sensitive applications involving air emissions or wastewater discharge. It employs approximately 50 people on three sites in the United Kingdom.
Volvere acquired Sira Test and Certification Limited and Sira Certification Service in September 2005; Sira Environmental Limited was acquired in March 2006. The total consideration was approximately £1.4 million. Since acquisition Volvere has strengthened and improved the Sira Certification businesses which has resulted in a substantial increase in their profitability. However, the needs of certification clients are changing and, in Volvere's view, are served better by certification providers with global reach. The acquisition by a respected global player is, the Directors believe, in the best interests of Sira Certification, its clients, its staff and Volvere's shareholders.
Financial information and use of proceeds
At Completion, Volvere will receive Initial Consideration of £8.0 million in cash. Volvere has given certain warranties and indemnities to CSA Group as is customary in transactions of this type. Of the Initial Consideration, £0.8 million will be held in escrow pending any claims by CSA Group under such warranties and indemnities following Completion.
Deferred Consideration of a maximum of £0.6 million is payable contingent upon Sira Certification meeting certain EBITDA targets for 2009 and 2010.
For the year ended 31 December 2008 the revenue of Sira Certification was £4.2 million and the earnings before interest, tax and amortisation of intangibles were £0.87 million (before Groupcharges). It is estimated that the net assets at Completion of the businesses that are the subject of the disposal will be approximately nil; all bank debt within Sira Certification has been repaid and the Group is now debt-free.
Following the disposal the Group will have cash (including that held in escrow) of approximately £18.5 million and marketable securities with a value of approximately £1.5 million. The cash will be used in pursuance of the Group's investing policy. As at Completion the estimated net assets per share will be approximately £3.20.
The Group's security solutions business, Sira Defence & Security Limited, is unaffected by the disposal, as is the Group's 50% holding in Interactive Prospect Targeting Limited.
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Notes to editors:
CSA Group is an independent, not-for-profit membership association serving business, industry, government and consumers. CSA Group consists of three divisions: CSA Standards, a leading standards-based solutions organization, providing standards development, application products, training and advisory services; CSA International, which provides testing and certification services for electrical, mechanical, plumbing, gas and a variety of other products; and OnSpeX, a provider of consumer product evaluation, inspection and advisory services for retailers and manufacturers.
CSA Group employs more than 1,400 people around the world. CSA Group is a global company and provides services to more than 20,000 companies in over 60 countries. For more, visit www.csagroup.org
Headquartered in Chester, and with labs/offices in Bakewell and Crayford the SIRA companies employ approximately 50 people, including specialised engineers and management. For more information on Sira Certification, please visit: www.siracertification.com