Acquisition of Minority Inter

RNS Number : 3456Y

Altitude Group PLC

21 December 2010

 



AIM: ALT

21 December 2010

Altitude Group plc

("Altitude" or "the Company")

Acquisition of Remaining Minority Interest in PromoServe Business Systems Limited ("PromoServe")

Altitude is pleased to announce that it has agreed to acquire the remaining 20% of PromoServe's share capital, of which it currently owns 80%.  The consideration for the acquisition of the remaining shares in PromoServe is £200,000 in cash, which will be satisfied from the Company's existing cash resources. Completion is expected to take place on 4 January 2011.

Altitude first acquired an interest in PromoServe in July 2006 when it acquired 80% of Promoserve's share capital for £160,000.  At the time of this acquisition, a put option was agreed between the Company and the vendors of PromoServe which was eligible to be exercised by the vendors no earlier than the 5th anniversary of the date of completion of the acquisition and no later than the 10th anniversary of completion.

The exercise price was agreed at ten times the average pre-tax profit attributable to the 20% minority interest in Promoserve for the two financial years immediately preceding the exercise, subject to a maximum payment of £10 million (payable in new Ordinary Shares or bank guaranteed loan notes, at the discretion of the Company). In view of the importance of PromoServe to Altitude's business, the Company has agreed to acquire the minority interest early for £200,000 in cash.

PromoServe is part of Altitude's 'Trade Only' division, which provides marketing and technology tools to both suppliers and distributors operating in the promotional merchandise industry.  PromoServe offers a suite of "Cloud" and Server based software to corporate gift and clothing distributors and suppliers, and is aimed at helping them increase revenues and improve business processes.

Martin Varley, Altitude's CEO, commented:

"I am delighted that we have agreed to purchase the remaining 20% of PromoServe. The business has seen significant improvements in both profitability and cash generation over the last 12 months and by acquiring the minority interest now, we are better able to integrate the business fully with the rest of the Trade Only business which will help us with our US expansion." 

Contacts:

Altitude Group plc
Martin Varley (Chief Executive)	Tel:  [phone]
David Smith  (Finance Director)	Tel:  [phone]
Merchant Securities Limited
Lindsay Mair / Bidhi Bhoma	Tel:  [phone]

Notes:

Altitude Group plc has two distinct but related businesses.  The Promotional Marketing division is one of the UK's leading providers of promotional merchandise to corporate and trade customers and has been built through a combination of organic growth and bolt-on acquisitions.  The Exhibitions and Technology division (Trade Only) provides various marketing and technology tools to both suppliers and distributors operating in the promotional merchandise industry.  This division organises the UK's biggest trade show for promotional products and offers a suite of "Cloud" and Server based software to companies of all sizes in the sector.

 

END

 

 

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