Disposal

RNS Number : 3436V

Adventis Group PLC

11 January 2012

 



Adventis Group Plc ("ATG.L")

("Adventis" or the "Group")

Disposal of certain assets of Adgenda Media Limited

Adventis announces that after close of business yesterday it sold the business and a number of assets (the "Assets") of its remaining media buying subsidiary, Adgenda Media Limited ("Adgenda"), to Mensola Co 116 Limited ("Buyer"), of which certain directors of Adgenda are or will become shareholders (the "Disposal"). Immediately following completion all direct employees of Adgenda will transfer to the Buyer.

Under the terms of the sale agreement between Adventis, Adgenda, the Buyer and the Buyer's guarantor Emerge Limited (the "Sale Agreement"), the total consideration payable in cash for the Assets is £506,000 of which £200,000 will be paid in monthly cash instalments over the next 24 months. In addition, as part of the consideration, the Buyer shall assume and be responsible for the discharge of £845,000 of trading liabilities of Adgenda. Adgenda will transfer customer prepayments of £265,000 to the Buyer and will make an equivalent payment for the assumption of those obligations. Simultaneously, Adventis has settled a liability of £306,000 due to a director of Adgenda in respect of deferred purchase consideration due under the terms of the 2005 agreement to acquire Adgenda, as varied by a supplemental agreement in June 2010.

The Sale Agreement provides that Adgenda will retain all trade debtors estimated at £1,200,000. It is envisaged that proceeds from realisation of these debtors will be used to settle certain residual creditors estimated at £600,000 retained by Adgenda under the Sale Agreement and to reduce the Group's current bank indebtedness.

In the year ended 31 December 2010, Adgenda generated turnover of £4,767,000, net revenues of £1,064,000 and a profit before tax of £287,000. It is not possible to reliably measure, and therefore disclose, the profit attributable to the Assets from the Adgenda business as a whole. At 31 December 2010 the Group carried consolidation goodwill of £1,425,000 in relation to Adgenda: an impairment charge of £74,000 will be recognised as a non-cash item in the Group's financial results for the year ended 31 December 2011.

The Disposal will reduce the Group's profits. However, as announced in the Company's preliminary results on 27 May 2011, the Group is in a period of turnaround whereby "every aspect of the business is subject to re-examination and repair. Those business operations that are unviable will be sold or closed if a buyer cannot be found". As part of this process, the directors of Adventis (the "Directors") have determined that the Group's media division is no longer core to the Group and the Disposal follows the recent sale of the trade and goodwill of the Group's other media subsidiary, Adventis Media Limited (formerly Adventis Coltman Limited), which was announced on 7 December 2011.

Following the Disposal, the Group's focus will predominantly be on developing and growing its Technology division, comprising bChannels Limited and Second2 Limited.

Certain directors of Adgenda are, or will become, shareholders of the Buyer: they are not directors of Adventis. However, the Disposal constitutes a related party transaction for the purposes of AIM Rule 13 of the AIM Rules for Companies (the "AIM Rules"). In accordance with the AIM Rules, the Directors, having consulted with the Company's nominated adviser, Arbuthnot Securities Limited, consider that the Disposal is fair and reasonable insofar as its shareholders are concerned.

Nick Winks, Chairman of Adventis, commented:

"Following the sale of Adgenda, the Group no longer has a media division. More importantly, the Group can now focus on its technology businesses where we believe there to be a number of long term growth opportunities."

Enquiries:

Adventis Group Plc                        01494 731600

Nick Winks, Chairman

Andrew Pearson, Finance Director

Arbuthnot Securities Limited            020 7012 2000

Tom Griffiths                              

Rebecca Gordon

 

END

 

 

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