Acquisition

Anite Group PLC 10 January 2002 ANITE GROUP PLC ('Anite' or 'Company') Anite Acquires Lorien Consulting for up to £4.8 million INTRODUCTION Anite, the European consultancy and services company, today announces that it has, through its wholly owned subsidiary, Anite Public Sector Limited, entered into a conditional agreement to acquire the business of Lorien Consulting, a division of Lorien Plc specialising in customer loyalty consultancy, management consultancy and IT consultancy services across government and industry for a consideration of up to £4.8 million. The consideration comprises an initial consideration of £2 million in cash payable on completion of the transaction and a deferred payment of £2.5 million in cash which is guaranteed by Lloyds TSB Bank Plc. The total consideration is subject to an adjustment based on the net asset value of Lorien Consulting at completion, subject to a maximum upwards adjustment of £ 300,000. BACKGROUND TO AND REASONS FOR THE ACQUISITION Anite Group provides a portfolio of services from IT consultancy and applications software to systems integration and managed services to four principal markets: telecoms, travel, public sector and finance. Anite Public Sector, which is acquiring Lorien Consulting, offers services to local and central government covering social services, revenue, benefits, housing applications and criminal justice, principally in the UK. Anite continues to build its position in the local authorities' market, with 72% penetration, based on a range of applications and increasing customer base. Anite's public sector business is also well placed to benefit from the government's initiatives for 'joined-up' local and central government and e-government, which include budgeted spending, by 2005, of £2bn on e-government solutions to local authorities. Following its establishment as a fully integrated and homogenous business during the last financial year, the business has grown its sales from £7m two years ago to £38m last year, generating operating profits before tax of £2.2m. For the six months to 30th October 2001, compared to the same period last year, sales were up 76% to £ 23.7m, with operating profits before goodwill, amortisation and interest 765% higher at £2.2m. At 30th October 2001, order books totalled £29m. Lorien Consulting provides customer loyalty consultancy, management consultancy and IT consultancy services to public sector organisations including government departments and local and regional authorities, businesses in the telecommunications, utilities and transport sectors as well as a number of private sector clients. It employs over 70 people, principally based in Chertsey in Surrey. The acquired business will continue to be led by George Kalorkoti, its current Managing Director, and will provide the nucleus for an expanded consultancy and systems integration operation, building on the solutions capability already provided by Anite to its central government clients. Following improved profitability in 2001, Lorien Consulting is expected to contribute towards Anite Public Sector's performance in the financial year ended 30th April 2003 by enhancing its market offering and overall capabilities structure. STRUCTURE As at 26 November 2000 (being the last date to which annual accounts for Lorien Plc have been prepared) the value of the net assets the subject of the transaction was £1.525m with profits attributable to those net assets for such 12 month period of £306,000 on turnover of £7.906m. The Lorien Consulting business is carried on by Lorien Plc through three wholly owned subsidiaries, Business Process Improvements Limited ('BPI'), Chatsfield Technologies Limited ('Chatsfield') and P-E International Plc ('P-E'). The transaction involves the acquisition of the assets of P-E and the entire issued share capital of Chatsfield and BPI. The apportionment of the consideration between the asset purchase agreement and the share purchase agreement is as follows: (i) In respect of the acquisition of the assets from P-E, £550,000 in cash will be paid on completion and £2,500,000 in cash will be paid 12 months following completion. (ii) In respect of the acquisition of the issued share capital of each of BPI and Chatsfield, £1,450,000 in cash will be paid on completion. (iii) The total consideration payable will be adjusted and may be increased or decreased based on a net asset valuation 7 months following completion, subject to a cap of £300,000 being payable by Anite in excess of the £4.5 million consideration. The transaction is conditional upon Lorien Plc obtaining shareholder consent. Lorien Plc has given notice to its shareholders that an extraordinary meeting of its shareholders will take place in respect of the approval of this transaction on 11 February 2002 and completion is expected to take place immediately thereafter. Anite's Chief Executive John Hawkins, commenting on the acquisition, said: 'Through the acquisition of Lorien Consulting we will significantly strengthen our strategic consultancy capability in the Public Sector market. The innovative customer programmes provided by Lorien will be offered across the Anite Group customer base and provide improved customer retention and loyalty for our clients customers.' - Ends - For further information please contact: www.anite.com Anite Group Plc 0118 945 0121 John Hawkins, Chief Executive Simon Hunt, Finance Director Weber Shandwick Square Mile Reg Hoare/Laurence Read
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