Acquisition

RNS Number : 5586K

Spice PLC

22 December 2008

 



22 December 2008

Spice plc

Acquisition of National Industry Fuel Efficiency Service Limited

Spice plc ("Spice" or "the Group"), the provider of total utility support services, is pleased to announce the acquisition of National Industry Fuel Efficiency Service Limited ("Nifes"). NIFES will become part of the Group's Supply Division.

Working across the energy and environmental sectors, Nifes provides consultancy, design and delivery services with particular focus on:

• All aspects of energy advice and strategy;

• Renewable energy especially Combined Heat and Power;

• Carbon Management Programmes;

• Energy performance assessment and certification;

• Legislative compliance services;

• Energy efficiency assessment; and  

• Mechanical and Engineering services, design and project management.

The acquisition of Nifes is for an initial cash consideration of £5.1 million. The initial cash consideration is subject to adjustment based on working capital and net assets at completion. Additional contingent consideration of up to £1.9 million will be payable in cash based on Nifes' results for the period ending, and forward order book at, 31 October 2009. The maximum total cash consideration payable (including the initial cash consideration, the working capital and net assets adjustment and the additional contingent cash consideration) is capped at £7.5 million.

Nifes was formed in 1953 by the UK Government Ministry for Fuel and Power, with the aim of stimulating energy efficiency improvements in industry, in order to release capacity for economic growth.

Howard Metcalfe, who will remain with the business following acquisition, led a management buy out of the business in 1989. Nifes is located in Altrincham with three additional offices in Glasgow, Nottingham and Bishops Stortford. Nifes employs approximately 114 UK based staff and is presently using around 20 sub-contractors to cope with increasing demand. The majority of the staff are engineers and technicians who are directly responsible for delivering services to clients. 

The audited financial statements for the 12 months to 31 October 2008 showed turnover of £8.8 million, adjusted operating profits of £0.86 million and profits before tax of £0.37 million. Gross assets at 31 October 2008 were £3.6 million. The initial cash consideration represents a multiple of 5.9 times historical adjusted operating profit.

Simon Rigby, Chief Executive Officer of Spice, said:

"The acquisition of Nifes creates a step change in our position within the energy and environmental management sector. It is increasingly important to cover all aspects of energy services from procurement through to renewable development."

"The market focus and skill base of Nifes are highly complementary to those of our existing Energy business, which makes our service offering to all of our customers much stronger at a time when the regulatory and cost drivers associated with energy and the environment are intensifying."

"We believe that Nifes' public sector heritage will greatly enhance Spice's ability to react to the Energy Efficiency objectives imposed on public sector organisations by the Climate Change Act 2008."

Howard Metcalfe, Managing Director of Nifes said:

"We are delighted to be joining Spice. We have been discussing this for some time and believe that, as part of Spice, our business will be able to bring new capabilities to our current customers and deliver our strengths to new markets."

Ends

Enquiries:

Spice plc                                             Tel: [phone]

Simon Rigby, Chief Executive Officer

Oliver Lightowlers, Group Finance Director

Andrew Catchpole, Strategy and Development Director

Financial Dynamics                            Tel: [phone]

Billy Clegg

Caroline Stewart

KBC Peel Hunt (Broker)                   Tel: [phone]

Julian Blunt

NOTES TO EDITORS

Spice plc

Spice is a total utility infrastructure support services business. The Group's operations were founded in 1996 and have their origins in the electricity industry, though the range of activities has since been expanded into the water sector, niche telecommunications services, statutory gas inspections, energy management and facilities management. Spice's businesses have a common theme of delivering and co-ordinating infrastructure services to customers, and the technological element within the product mix has been built up significantly over the course of the last three years.

National Industry Fuel Efficiency Service Limited

http://www.nifes.co.uk/about.html

 

END

 

 

ACQTTBBTMMTTMTP