Last checked at 16 Apr 2010 07:00
16th April 2010
Westminster Group Plc:
Acquisition of CTAC Ltd For up to £1.8 million
and Subscription of 1,250,000 shares at 41p toraise £512,500 before expenses
Westminster Group Plc ('Westminster' or 'theGroup'), the AIM listed supplier of system solutions and products to the security,defence, fire protection and safety markets worldwide, announces that it has acquiredthe entire issued share capital of CTAC Ltd ('CTAC' or the 'Company'), for amaximum consideration of up to £1.8 million ('Acquisition').
CTAC is a specialist integrated provider of 'highend' security solutions to a blue chip client base including Brinks, DeBeers LVand Seven Trent Water who operate in operationally critical, high value and highprofile fields such as cash handling, bullion storage, jewellery and diamond merchants,chemical storage and utilities.
A key strength of the business is its 24hour AlarmReceiving Centre (ARC) which is built, operated and certificated to the NationalSecurity Inspectorate (NSI) Gold standard, the highest level of such certificationin the UK. The ARC operates as a 24/7 control & command centre and monitors alarmand video signals from over 1,000 systems across the UK, producing a strong recurringrevenue stream.
Founded in 2004, the Company operates from a 3,000sqft premises in Kidderminster, UK, supporting clients primarily within the UK butwith a growing interest and significant market potential internationally.
Westminster has built a considerable global presenceoperating through established agents in 45 countries, offering a niche portfolioof security, defence, fire and safety products and services. The addition of CTACto the Group continues Westminster's expansion through the integration of complementaryservices. Synergistic benefits of the Acquisition include:
- Niche business in sector and good fit withWestminster's core business;
- 24 hour Control & Command facility and AlarmReceiving Centre is a major enhancement to the Group's service operations presentingcross selling opportunities to other Group companies and international clients operatingacross international time zones;
- Opportunity to add new services such as 24hour travel advice, emergency medical & hostile extraction services to overseas travellersand third party remote monitoring & call centre services; and
- Ready built nationwide service team and infrastructureto serve Westminster's increasing UK customer base, including Westminster's recentlyannounced contract with the Ministry of Justice covering 139 Prisons in England andWales.
The net assets of CTAC at 31 December 2009 were£279,928. The pre tax loss for the year to 31st December 2009 (unaudited),after exceptional costs of £274,453, was £69,770 compared with a pre tax profit forthe year to 31st December 2008 of £200,098. The exceptional costs of £274,453in 2009 relate to contract over-runs, now rectified, and one-off consultancy feesrelating to preparation for sale and the NSI certification costs. Excluding exceptionalcosts the operating profit for 2009 was £204,683. The first three trading monthsof 2010 indicate an underlying trading profit of £89,000 and a strong recurring revenuebase.
The initial consideration of £825,000 will be satisfiedby £500,000 in cash payable out of the Group's own cash resources and the balanceof £325,000 by the issue of 792,683 new ordinary shares of 10p each in Westminster('Ordinary Shares') at 41p on the date of completion ("Consideration Shares").
Two further performance based payments will be made,calculated on 40% of net profit in each of the two years following completion, upto a maximum aggregate additional payment of £1 million.
Following acquisition, the vendor and Managing Directorof CTAC, Adrian Johnson, will remain with the Company as a consultant for a periodof 24 months. All other staff, with the exception of Cathy Johnson, will remain withthe Company.
The Group is today pleased to announce that it hasraised further working capital through a subscription of 1,250,000 new Ordinary Sharesat 41p, raising £512,500 before expenses from new investors ('Subscription Shares').Application has today been made for the Subscription Shares and the ConsiderationShares ("New Shares") to be admitted to trading on AIM and admission of the NewShares is expected to take place on 22nd April 2010. Following the Issueof the New Shares, Westminster's enlarged issued share capital will comprise 17,730,754Ordinary Shares.
The above figure may be used byshareholders as the denominator for the calculations by which they will determineif they are required to notify their interest in, or a change to their interest in,Westminster Group plc, under the Disclosure and Transparency Rules.
Commenting on the Acquisition Peter Fowler, ChiefExecutive of Westminster Group, said:
"I am delighted to welcome CTAC into the WestminsterGroup. I believe the Company is at an exciting stage with tremendous growth prospectsand by joining our Group we can now provide the investment and marketing infrastructureto help achieve that growth.
"The Company is an excellent fit for our business,broadening our scope of services and offering additional synergistic opportunitiesto our other Group companies. CTAC is an excellent fit with our RMS business anda clear benefit is for the two businesses to share resources and technologies aswell as cross selling services.
"The 24 hour ARC and control centre is an excellentaddition to our Group enabling us to offer a wide range of new services. It willbe of particular benefit to our Close Protection business, Longmoor, who will usethe centre for monitoring and management of operations and for intelligence gatheringfor client travel advice and emergency extraction services.
"The acquisition of CTAC, with its large UK customerbase and sizeable recurring revenue stream, is also in line with our current strategyof enhancing our operations in the UK and Europe and in significantly growing highmargin recurring revenue.
"I have been impressed by what Adrian and his teamhave achieved in the last few years and with the quality of CTAC's operations andclient base. I am sure that the business will continue to flourish as part of ourGroup and I would like to welcome Adrian and all of his team to Westminster and lookforward to growing the business with them all."
Adrian Johnson, Founder and Managing Director ofCTAC added:
"This deal gives CTAC an excellent opportunityfor accelerated growth through Westminster's existing client base, infrastructureand international reputation.
"I am proud of what we have achieved with CTACover the past five years and our success is due, in no small part, to the hard workand effort of all our employees. I have enjoyed working with Peter and his managementteam throughout this process and been impressed by Westminster's friendly but businesslikeatmosphere. This was one of the major factors in choosing to join Westminster togetherwith the belief that our staff and business would benefit and thrive within the Group.
"We look forward to working with Peter and histeam."
Enquiries:
Peter Fowler 01295 756 300
Chief Executive - Westminster Group Plc
Nicholas Mearing-Smith 01295756 300
Finance Director - Westminster Group Plc
Nandita Sahgal 020 7107 8000
Catherine Leftley
Seymour Pierce
Tom Cooper/Paul Vann 0117 9858989
Winningtons Financial 0797 122 1972
Notes:
Westminster Group plc is a leader in the supplyof system solutions and products to the security, defence, fire protection and safetymarkets worldwide.
Westminster's principal activity is the design,supply and ongoing support of advanced technology security solutions, risk assessmentsand close protection services. These can range from product only assignments, suchas the supply of specialised scanners, to the design and implementation of an integratedsystem solution such as a border detection and surveillance system. The majorityof its customer base, by value, comprises governments and government agencies, nongovernmental organisations and blue chip commercial organisations.