Acquisition

20 Apr 2009 07:00



For Immediate Release 20 April 2009

Northbridge Industrial Services Plc.

("Northbridge" or "The Company")

ACQUISITION OF 66.67% OF THE INTEREST IN THE SHARE CAPITAL OF TYNE TECHNICAL EQUIPMENT RENTAL SERVICES LLC ('TTERS')

Northbridge Industrial Services Plc is today pleased to announce the acquisition of 66.67% of the interests of Tyne Technical Equipment Rental Services LLC ("TTERS")

TTERS is a Dubai registered company whose principal business is the rental of generators and the sale of associated services to the infrastructure and the oil & gas industries in the United Arab Emirates.

TTERS was formed in 2004 by the current shareholders who will remain with the business. Its unaudited accounts for the year ended 31 December 2008 reported a turnover of £600,000 and a net profit before tax of £57,000. Net assets of the business at 31 December 2008 were £186,000.  

The shares of TTERS are being acquired by RDS (Technical) Ltd ("RDS") a wholly owned subsidiary of Northbridge Middle East FZE ("NME"), our existing business in the region. As part of the transaction RDS will provide up to £250,000 by way of an intercompany loan for further investment into the TTERS hire fleet.

The total consideration payable will be £170,000, which will be satisfied by £62,000 in cash and by the issue of 80,000 new ordinary shares at a price of 135 pence per ordinary share. Additionally, Northbridge has the option to acquire the remaining 33.33% of the interests in the company on 13 April 2011 for a price based on a multiple of net profits in the preceding 12 months, subject to a maximum cap of £680,000 (total £850,000). At this level of consideration the profit before taxation of TTERS would be £250,000.  The shares issued to the vendors as consideration are to be held for a minimum period of 24 months.

The 80,000 new ordinary shares will rank pari passu with the existing ordinary shares of the Company, and admission to trading in the new shares is expected to commence on 24 April 2009.  Following the issue of these shares, the Company will have 7,710,149 ordinary shares in issue of which 152,150 are held in treasury. The vendor, Geoff Forster and his son Jonny, have agreed new contracts of employment together with restrictive covenants for 3 years and 2 years respectively.

This acquisition will help to further Northbridge's strategy to acquire and develop companies which sell and hire industrial equipment. In addition, it will complement our existing activities in the area and expand the geographical area serviced by our previous and similar acquisition of RDS.

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