Acquisition

3 Feb 2006 07:00

Croma Group PLC03 February 2006 3 FEBRUARY 2006 CROMA GROUP PLC ("Croma" or "the Group") ACQUISITION OF VIGILANT (SCOTLAND) LIMITED The Board of Croma, the specialists in the design, development and production ofovert and covert surveillance, security and defence related products, is pleasedto announce today the acquisition of specialist asset protection companyVigilant Security (Scotland) Limited ("Vigilant"). As well as broadening the Group's product range and services, the addition willenhance Croma's cross-selling capabilities. HIGHLIGHTS •Croma to acquire Vigilant for an initial payment of £804,000 to be satisfied in cash and the issue of 8,907,692 new ordinary shares; •This is the first of two acquisitions referred to in October's trading statement; •Vigilant will operate as a stand alone, but wholly owned subsidiary of Croma; •Increased cross-selling opportunities; and •Placing of 6,500,000 new ordinary shares at 5p each announced 31 October to part finance acquisition. Vigilant is a specialist company dealing with asset protection in theindustrial, commercial and public utilities market. Management and operatives ofthe company are primarily ex Military personnel, well versed in the variousaspects of high level security and protection. Vigilant is also developing aForces resettlement course for re-training of servicemen operating in hostileenvironments. In the year ended 31 December 2004 Vigilant generated profit before taxation ofapproximately £88,000 on turnover of approximately £1,202,000. Net assets as at31 December 2004 were £97,000. Vigilant will operate as a stand alone, but wholly owned subsidiary of CromaGroup, trading as Croma Vigilant Limited, with an operating base in Scotland.Whilst continuing to operate and further develop its prime areas of activities,Vigilant will also benefit from the interchange between other Croma Groupcompanies in terms of products and services. This should result in a level ofcross referral between the respective customer bases. The initial payment for the acquisition is £804,000 comprising of £225,000 incash and the balance in Croma shares at 6.5p ("Vendor Shares"). Further paymentsup to a maximum of £2,196,000 will be made on a performance-related basis forthe trading period ending 31 December 2006. The Board also highlights to shareholders today that work is progressing towardsthe completion of the second acquisition which is in the field of biometrics. Itis hoped that this will take place shortly upon completion of the due diligence. Croma also announced on 31 January 2006 that it has placed 6,500,000 newordinary shares at 5p each with existing institutional shareholders to, in part,fund the initial cash consideration for Vigilant. Application has been made for the admission of the Vendor Shares to trading onthe AIM market of the London Stock Exchange on 9 February 2006. The VendorShares will rank pari passu with the existing ordinary shares of the Company. Commenting on the acquisition John French, Croma's Chairman and Chief Executivesaid "We are very pleased with this acquisition. Not only as a stand alonesubsidiary with significant opportunities for growth, but also for the exchangeof potential customer development between the company and other members of theCroma group. "There are a number of areas of development which have been targeted and weexpect to see some interesting developments follow through as a result of thisacquisition. It is also pleasing to note that the Vendors have accepted theshare element of the acquisition at a premium, which I believe indicatesconfidence in the prospects of Croma going forward." --ENDS-- Enquiries: Croma Group plcJohn French, Chairman & Chief Executive Mobile: 07836 722 482 Bishopsgate Communications Ltd. Tel: 020 7430 1600Dominic Barretto Mobile: 07930 450 156Nick Rome Mobile: 07748 325 236 Notes to Editors: Listed on the AIM market of The London Stock Exchange, Croma Group plc, the specialists in the design, development, production and marketing of overt and covert surveillance and defence related products, comprises of three divisions; namely Croma Defence Systems Ltd, Shawley (a division of Croma Defence) and R&D Design Services Ltd. This information is provided by RNS The company news service from the London Stock Exchange