Proposed Acquisition of Advent Communications Ltd

Vislink PLC 29 March 2000 Vislink plc Proposed acquisition of Advent Communications Limited 29 March 2000 Introduction Vislink plc ('Vislink' or 'the Company') announces today proposals to acquire Advent Communications Limited ('Advent'). The Company has conditionally agreed to acquire Advent for a consideration of £14.08 million, to be satisfied by the payment of £12.46 million in cash and the issue of up to 1.2 million new Ordinary Shares of IR2.5p each in the capital of the Company (the 'new Ordinary Shares' valued at £1.62 million on the basis of the closing mid-market price of a Vislink plc Ordinary Share of 135.0p on 28 March 2000, being the last business day prior to the publication of this announcement). In addition, Advent will pay £1.14 million in pre-sale dividends to its current shareholders and post-completion pension contributions of £0.88 million to its current directors. In view of its size, the acquisition of Advent is conditional upon the approval of shareholders. An Extraordinary General Meeting will be convened to seek such approval. The acquisition of Advent provides the first step in the next stage of the Company's strategy, which is to develop the Company's Broadcast and Telecommunications and Video Technology Divisions, whose technological base and expertise is expected to allow for both organic and acquisition-led growth in the Company's markets. In particular, the Broadcast and Telecommunications Division is now demonstrating an increasing capability in its markets, for the supply of broadcast quality transmission systems via satellite and terrestrial microwave. Information on Advent Advent was established in 1986 when David Garrood, Roger Crawshaw and Stephen McGuinness ('the Advent Directors'), with backing from 3i plc, identified the opportunity to develop a mobile satellite communications product. The three founders of Advent remain working directors of Advent and their family trusts remain shareholders. Advent has focused on the design and manufacture of equipment for the satellite news gathering ('SNG') market. SNG products principally fall into three product types: portable 'flyaway' systems, mobile vehicle installations and fixed earth stations. Flyaway systems comprise the essential electronics for a satellite terminal in portable form where the component parts generally satisfy the size and weight limitations for passenger aircraft transportation. Vehicle installations comprise the same electronics plus additional monitoring facilities, standby power generators and often self-seeking satellite software for alignment by non-technical personnel. Earth stations are permanent facilities usually comprising non-mobile electronics and significantly larger-sized antennas for increased transmissions band width range and capability. Advent has a strong development expertise and has been awarded a number of industry accolades. In particular, its NewSwift product won a Queen's Award for Technology in 1998. For the year ended 1 August 1999, Advent reported pre-tax profits of £0.83 million (1998 - £1.23 million) on sales of £16.4 million (1998 - £20.2 million) and net assets of £3.4 million (1998 - £3.0 million). Reasons for the acquisition The acquisition of Advent provides the opportunity to create a much broader- based satellite communications business and to grow the Company's overall broadcast and telecommunications business. The Directors anticipate that the Acquisition will improve the Group's opportunities for greater international coverage and widen its satellite communications product range. In addition, the Directors expect that benefits will derive from vertical integration through utilising the Group's electronics manufacturing capabilities. The Directors also anticipate that the enlarged Broadcast and Telecommunications Division will be able to benefit from the growth in telecommunications and broadcasting markets arising from the development of internet data and broadcast quality digital video. Acquisition The Company has conditionally agreed to acquire Advent for a consideration of £14.08 million, to be satisfied by the payment of £12.46 million in cash on completion of the acquisition ('Completion'), the issue of 504,000 new Ordinary Shares to the Advent Directors on Completion and the issue of 696,000 new Ordinary Shares to the Advent Directors on the second anniversary of Completion if each of them remains employed by Advent at that date. On the basis of the closing mid-market price of a Vislink plc Ordinary Share of 135.0p on 28 March 2000, being the last business day prior to the publication of this announcement, the 1.2 million new Ordinary Shares to be issued in connection with the Acquisition are valued at £1.62 million. In addition, a pre-sale dividend of £1.14 million will be paid by Advent to its shareholders and post-Completion pension contributions of £0.88 million in aggregate will be paid by Advent to the Advent Directors' occupational pension schemes. New Ordinary Shares The new Ordinary Shares will be allotted and issued credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares of Vislink plc, including for any dividend declared or paid after the date of issue. However, the 504,000 new Ordinary Shares to be issued on Completion will not rank for the final proposed dividend of 0.3p per share in respect of the year ended 31 December 1999, which will be paid on 4 July 2000 to shareholders on the register at the close of business on 14 April 2000 subject to shareholder approval at the next Annual General Meeting. Applications will be made for the 504,000 new Ordinary Shares to be issued on Completion to be admitted to the Official Lists of the Irish Stock Exchange and the London Stock Exchange. For further information on Wednesday 29 March 2000, please contact: Ian Scott-Gall 020 7353 1500 Chief Executive, Vislink plc James Trumper 020 7353 1500 Finance Director, Vislink plc Andrew Sharkey / Emmanuel Kenning 020 7353 1500 Luther Pendragon
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