Acquisition

8 Apr 2005 07:00

Quarto Group Inc08 April 2005 QUARTO TO ACQUIRE NEW ZEALAND'S LEADING DISPLAY MARKETING BOOKS BUSINESS The Quarto Group, Inc., the London-based and listed international bookpublisher, announces that it has conditionally agreed to acquire Premier BooksLimited, New Zealand's leading display marketing books business. "Premier Books is an extremely well run business that has long dominated thedisplay marketing of books in New Zealand. The acquisition complements ouracquisition, of Lifetime Books, in Australia, in November 2004. The twobusinesses will be run autonomously, but we anticipate that there will be somemutual benefits, particularly on the buying side, as both Premier and Lifetimefrequently acquire exclusive display marketing rights, in their respectivecountries, to the same titles," commented Laurence F Orbach, chairman and chiefexecutive officer of Quarto. Under the terms of the agreement, Quarto is initially acquiring 70% of Premier'sequity, with the balance being the subject of put-and-call agreements,exercisable over the next ten years. The initial consideration is NZ$5.6 million (£2.1 million), payable in cash, outof Quarto's existing bank facilities, on closing, which is expected to takeplace within 30 days, after the completion of the audit of Premier's results forthe year ended March 31st, 2005. In the year ended March 31st, 2004, Premier made an unaudited pre-tax profit ofNZ$1.0 million, after non-recurring expenses, on a turnover of NZ$9.4 million.Unaudited net assets at that date totalled NZ$0.66 million. In the year ended March 31st, 2005, after adding back non-recurring expenses, itis expected that Premier will make an audited pre-tax profit of over NZ$1.5million on a turnover of NZ$10.2 million. After payment of a dividend, adjustednet assets at March 31st, 2005 will total NZ$0.4 million. Premier's management, led by Grant Letica, 39, the chief executive officer, isremaining in place, and Mr Letica will retain 20% of the equity in the business.Premier is based in Auckland, operates through approximately 50 representativespaid on commission, and has 12 employees. Laurence F. Orbach concluded: "In March 2004, following a strategic review,Quarto announced that the Board intended to grow Quarto substantially throughmaking selective and significant acquisitions and accelerating organicinitiatives. Premier is Quarto's fourth acquisition since then. Furtheracquisitions continue to be sought." Notes for Editors: Quarto is an international book publisher with two principal strands ofactivity: it publishes, under imprints owned by the Group, books and art printsin the US, the UK, and Australia; and it creates books that are licensed toother publishers for publication under their own imprints in many languagesaround the world. 2004 was Quarto's sixth successive year of increase in underlying EPS. Quartomade three acquisitions in the second half of 2004, in the USA, the UK, andAustralia. Enquiries: The Quarto Group, Inc. 020-7700 9000Laurence Orbach (Chairman & CEO)Mick Mousley (Finance Director) Bankside Consultants LimitedCharles Ponsonby 020-7444 4166 This information is provided by RNS The company news service from the London Stock Exchange