Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Fayrewood PLC (FWY)

  Print      Mail a friend       Annual reports

Tuesday 17 October, 2006

Fayrewood PLC

UMD Disposal & Notice EGM

Fayrewood PLC
17 October 2006


For Immediate Release                                            17 OCTOBER 2006


                                 FAYREWOOD PLC


                            Proposed disposal of UMD
                                      and
                    Notice of Extraordinary General Meeting


Fayrewood plc ("Fayrewood", the "Company" or "the Group"), (AIM: FWY) the
pan-European computer distributor, announces it has entered into a conditional
agreement to sell UMD, SA ("UMD"), the largest business within Fayrewood's Niche
Distribution division, to Esprinet SpA ("Esprinet"), a company listed on the
Milan Stock Exchange.


Key Financials


   •The maximum total cash consideration to be received by Fayrewood in
    respect of the Disposal is €53.5 million supplemented by a pre-acquisition
    dividend of €3 million already paid
   •Esprinet will be assuming bank debt of up to €25.5 million implying an
    enterprise value of €79.0 million
   •UMD was acquired by Fayrewood in January 2002 for €27 million, with an
    enterprise value of €29 million
   •Fayrewood's closing mid-market price on Monday16 October was 91.5p
    valuing the Company at approximately £47 million. (€70 million)


Reasons for Disposal


   •The Board has examined a number of options to maximise shareholder value
   •The Fayrewood Board considers selling UMD to Esprinet the most attractive
    option, because:
      •Lack of suitable acquisition targets to a create larger pan-European
       distribution operation
      •Fayrewood's market rating not conducive to finance acquisitions
       through an equity issue
      •Stronger oversees competition through specialist and large
       multi-nationals resulting in margin pressure


Details of Disposal & Use of Proceeds


   •Maximum total cash consideration to be received by Fayrewood is €53.5
    million - supplemented by a pre-acquisition dividend of €3 million already
    paid to the Company by UMD


   •Esprinet will be assuming bank debt of up to €25.5 million implying an
    enterprise value of €79.0 million


   •€48.5 million is payable on completion - with €5 million payable over a
    six month period subject to adjustments
   •Discussions currently ongoing with advisers with regards to returning a
    large part of the proceeds to shareholders - further details will be
    announced as soon as possible


Post Disposal Strategy


   •The Board will be focused on:
      •improving profitability in remaining subsidiaries - Interface
       Solutions (UK) and Banque Magnetique (France)
      •considering options including focusing activities within the UK
      •Maximising value in its investment in Computerlinks AG



EGM Details : To Approve Disposal


   •To be held at the offices of Buchanan Communications, 45 Moorfields,
    London, EC2Y 9AE at 10.30 a.m. on 6 November 2006


Commenting on the proposed disposal, David Kleeman, Non-Executive Chairman said:


"UMD has been a hugely successful acquisition for Fayrewood over the last four
years since being acquired. That is clearly evident to see with the current
enterprise value of €79m compared to the €29m value put on UMD when we acquired
it. However, with increasingly testing market conditions Europe wide and our
continual focus on creating the best returns for shareholders being paramount,
the terms of the proposed disposal of UMD are in the best interests of the
Company and of shareholders as a whole. Accordingly we unanimously recommend
shareholders to approve the Disposal."



For further information please contact:
David Kleeman, Non-Executive Chairman                      07973 988 018
Paul Griffiths, Chief Executive                            0870 3515802
Fayrewood plc

Oliver Scott, Richard Kauffer
KBC Peel Hunt                                              020 7418 8900

Tim Anderson / Lisa Baderoon
Buchanan Communications                                    020 7466 5000




                            PROPOSED DISPOSAL OF UMD


Introduction


The Board of Fayrewood today announces that it has entered into a conditional
agreement to sell UMD, the largest business within Fayrewood's Niche
Distribution division, to Esprinet, a company listed on the Milan Stock Exchange.
The consideration payable to Fayrewood in respect of the Disposal comprises a
maximum cash consideration of €53.5 million supplemented by a pre-acquisition
dividend paid to Fayrewood by UMD of €3.0 million. In addition Esprinet will be
assuming bank debt of up to €25.5 million implying an enterprise value of €79.0
million.


In view of its size, the Disposal is conditional upon the approval of
shareholders, which is to be sought at an EGM of the Company to be held on 6
November 2006. A notice convening the EGM, at which the Resolution will be
proposed, is set out in the circular which has been posted to shareholders
today. Completion is also conditional upon the approval of the Spanish
competition authorities as Esprinet already trades in Spain through its wholly
owned subsidiary MemorySet SAU. Subject to satisfying these conditions,
completion is expected to take place before 31 December 2006.


The purpose of this announcement is to provide details of the Disposal, and to
explain why the Board considers this transaction to be in the best interests of
Fayrewood and its shareholders.


Information on UMD

UMD was formed in 1989 and was acquired by Fayrewood in January 2002 for a total
consideration in cash and shares, including the earn out over a four year
period, amounting to €27.0 million. Additionally UMD had bank debt on completion
of €2.0 million implying an enterprise value of €29.0 million.

UMD is a specialist distributor of computers, computer peripherals and consumer
electronic products, from a variety of world-wide manufacturers. It also has its
own label, Redbell, for which it has developed complementary products to exploit
gaps in its other manufacturer's product portfolios. It has four offices in
Spain, located in Madrid, Barcelona, Valencia and Bilbao, each of which provides
logistics, commercial and administrative services. The main logistics centre is
in Madrid, while the central sales, finance, purchasing, marketing and technical
service departments are located in Bilbao.

UMD is the largest business within the Niche Distribution division of Fayrewood
and represented 81 per cent. of the division's operating profit for the six
months ended 30 June 2006. UMD's pretax profits have increased from €5.6 million
in 2001 to €11.7 million in the year ended 31 December 2005. UMD had net assets
of €26.8 million as at 30 June 2006.



Reasons for the disposal


Following the acquisition of UMD in January 2002, the Board's strategy was to
create a significantly larger, pan-European IT distribution operation. However,
the Board has been unable to identify any European based company that meets the
Group's acquisition criteria. In addition to the lack of attractive targets, the
Directors believe that the market rating afforded to the Company would make it
inappropriate to finance any acquisitions through an issue of equity.


As stated at the time of our interim results for the six months ended 30 June
2006, UMD has been experiencing tougher trading conditions. Whilst sales in that
period increased by 5 per cent. the sales mix has been less favourable to the
detriment of margins. There has since been some success countering this trend
but overall margins are not expected to recover to levels seen in previous
years.


In part, the board considers the change in the sales mix is as a result of
changing market conditions. Fayrewood, as a medium sized distributor, now faces
stronger competition from both specialist traders and large multi-national
companies with a wide range of branded products. The range of products and wide
geographic presence of the large multi-national distributors gives them added
advantage when competing for market share.


As a result of all these factors the Board has been examining a number of
options for the Group with the aim of maximising shareholder value and
consequently your Board considers that selling UMD to Esprinet is in
shareholders' best interests. The Board, which has consulted with KBC Peel Hunt
Ltd., the Company's nominated adviser, considers that the consideration for UMD
is fair and reasonable.


Details of the Disposal


The consideration payable to Fayrewood in respect of the Disposal comprises a
maximum cash consideration of €53.5 million supplemented by a pre-acquisition
dividend paid to Fayrewood by UMD of €3.0 million. In addition Esprinet will be
assuming bank debt of up to €25.5 million implying an enterprise value of €79.0
million. On completion, €48.5 million will become payable in cash leaving a
retention of €5 million which will be released over a six month period subject
to the following adjustments. There will be a euro for euro deduction from the
retained monies if UMD's average debt exceeds €25.5 million over a period
between 1 September 2006 to completion. In the event that completion is delayed
beyond 31 December 2006 the average debt allowed, before any deductions are made
to the retention, will increase to €35.0 million to take account of the seasonal
increase in working capital requirements. The other adjustment to the retained
monies relates to any provisions that may be required following the sale of
inventory and realisation of trade debtors.


Fayrewood has provided certain warranties and indemnities which are customary
for a transaction of this nature. These relate to areas such as taxation,
property, environmental risks, employment and other issues. Fayrewood has agreed
to indemnify Esprinet for these potential risks for a period of approximately
four years following completion, subject to certain de-minimis levels and
supported by a first demand bank guarantee of up to a maximum amount of €8.0
million.


Use of proceeds


As the shares in UMD are held by Fayrewood's intermediate Dutch holding company
there should be no Dutch tax charge to Fayrewood on the gain arising from the
Disposal since Dutch Participation Exemption should apply.


The Board is currently discussing with its advisers the options for returning a
large part of the proceeds to shareholders. Further details of the outcome of
these discussions and the Board's plans arising from them will be announced as
soon as possible.


Post Disposal Strategy


The Board will continue to focus its efforts on the remaining subsidiaries,
Interface Solutions International in the UK and Banque Magnetique in France with
a view to improving profitability. The Board will also continue its strategy of
maximizing the value of its investment in Computerlinks AG. The Board will also
be further considering its options over the forthcoming months which may result
in a concentration of the Group's activities within the UK.


Extraordinary General Meeting


The Disposal is subject to the prior approval of shareholders at an EGM to be
held at the offices of Buchanan Communications, 45 Moorfields, London, EC2Y 9AE
at 10.30 a.m. on 6 November 2006.


Circular


The circular containing information of the proposed disposal and including EGM
details has today been posted to shareholders.


Timetable


   •Latest time and date for receipt of Forms of Proxy : 10:30 am on 2
    November 2006
   •Extraordinary General Meeting : 10:30 am on 6 November 2006












                      This information is provided by RNS
            The company news service from the London Stock Exchange