Acquisition

1 Aug 2006 07:01

Stilo International PLC01 August 2006 1st August 2006 Stilo International plc ("Stilo" or the "Company") Acquisition of Engineering Solutions business from Proceed Holdings Ltd Stilo today announces that Stilo Technology Limited ("Stilo Technology"), awholly owned subsidiary, has acquired certain assets and contracts comprisingthe Engineering Solutions business ("Engineering Solutions") of Proceed HoldingsLtd ("Proceed Holdings") in the UK. Engineering Solutions provides PLM (Product Lifecycle Management) consultancy,data migration and document management solutions to a number of major customersof SAP enterprise software. Stilo will employ five full-time Engineering Solutions staff, as well asobtaining access to Engineering Solution's established base of sub-contractors.In addition Stilo Technology has acquired certain existing customer contracts,solutions IP and a pipeline of prospective business. In the year to 31 December 2005 Engineering Solutions generated turnover£958,000 and a profit before tax of £116,000. In the five months ended 31 May2006 Engineering Solutions achieved profit before tax of £71,000 on turnover of£391,000. The Engineering Solutions business being acquired comprised estimatednet assets of £5,000 as at 31st December 2005. The maximum total consideration will be £440,000 of which £100,000 will be paidon completion, comprising £100,000 cash of which £50,000 will be applied byProceed Holdings to subscribe for 2,500,000 new Stilo 1p ordinary shares (the"Completion Shares") at 2.0p per share, compared with a closing mid-market priceon 31 July 2006 of 2.125p per share. The Company will pay up to a further£90,000 by way of Initial Deferred Consideration on or before 25th August 2007,subject to the turnover of Engineering Solutions for the year to 31st July 2007being not less than £750,000. All of the Initial Deferred Consideration will beapplied by Proceed Holdings to subscribe for up to a further 4,500,000 new 1pordinary Stilo shares at 2.0p per share. The Company will pay a Final DeferredConsideration on or before 20th August 2008 comprising a maximum cashconsideration of £250,000 subject to the Engineering Solutions achieving acombined profit before tax in the two years to 31st July 2008 of not less than£300,000. Of the Final Deferred Consideration, up to £100,000 will be applied byProceed Holdings to subscribe for up to 5,000,000 new Stilo 1p ordinary sharesat 2.0p per share. Application will be made for the 2,500,000 Completion Shares to be admitted fortrading on AIM and dealings in the Completion Shares are expected to commence on7th August 2006. Proceed Holdings Ltd Proceed Holdings is a private company formed in 2001 by a group of business ITspecialists with a deep understanding of the SAP marketplace. The EngineeringSolutions business provides PLM consultancy, Data Migration Services andDocument Management Solutions to customers in global aerospace, defence,manufacturing, pharmaceutical and telecommunications industries. The Board is also pleased to announce that Stilo continues to trade in line withexpectations. The Company anticipates that the interim results for the sixmonths ended 30th June 2006 will be announced on 6th September 2006. Commenting on these developments, Les Burnham, Chief Executive, Stilo, stated:"This acquisition will enable Stilo to provide SAP customers with a powerfulcombination of proven PLM consultancy, data migration and document managementsolutions in addition to our industry leading solutions for the publishing oftechnical information. It will provide a significant strengthening of our totalofferings in the engineering and manufacturing sectors." For further information please contact: Les Burnham Chief Executive, Stilo International plc01793 441 444 Russell Cook Charles Stanley Securities020 7149 6000 This information is provided by RNS The company news service from the London Stock Exchange