Placing and Acquisition
Embargoed: 0700hrs 17 February 2005
Buckland Group plc
('Buckland' or 'the Group')
Acquisition of the business and certain assets of Kigass Electronics Limited
Placing of 214,000,000 New Ordinary Shares at 0.5p per share by Seymour Pierce
to raise £1,070,000
The Board of Buckland is very pleased to announce that the Group has
conditionally agreed to acquire the business and certain assets of Kigass
Electronics Ltd ('Kigass') with the transaction expected to be completed
tomorrow morning.
Buckland is an industrial group with well-established, low cost production
facilities in Bangkok, Thailand. It currently manufactures connectors for the
consumer electronics industry and, under the Derlite name, spark ignition
electrodes for use in domestic and commercial gas appliances.
Kigass, based in the West Midlands, designs and manufactures spark ignition
electrodes and spark generators for use in domestic gas cookers and boilers. In
the year ended 30 June 2004 Kigass reported a pre-tax loss of £9,429, after
administrative expenses of £758,292, on sales of £2,755,000. The assets being
acquired are plant & equipment valued at £245,000, stocks of £445,000, and
goodwill of £700,000. After taking into account certain trade creditor
balances, the net consideration payable is £1,070,000 which is being satisfied
by a placing by Seymour Pierce Ltd of 214,000,000 new ordinary shares at 0.5p
each with institutional and other investors. Application has been made for
admission of the new ordinary shares to trading on the AIM market of the London
Stock Exchange and dealings are expected to commence on 18 February 2005.
Kigass' product range and customer base are highly complementary with
Derlite's. Whilst 95% of Kigass' sales are in the UK, over 95% of Derlite's
sales are currently in the rest of the EU and in USA/Mexico. Kigass' major
customers include Stoves, the UK market leader for domestic cooking appliances,
Electrolux and AGA Rangemaster. The combination of Derlite and Kigass gives the
Group a significant presence as a supplier of ignition components to the
domestic gas cooker markets in the USA/Mexico and the UK, with enhanced
potential to strengthen its position both in these markets and in the rest of
Europe. In particular, the Board believes that there is significant scope to
cross sell Kigass' spark generation equipment to Derlite's customers.
Patrick Rogers, Executive Chairman of Buckland, commented,
'Following the acquisition of Derlite in 2002, we have been able to grow its
sales very rapidly by utilising our low cost production facilities in Thailand
to win new business in North America and Europe. The acquisition of Kigass
significantly strengthens our position as a manufacturer of gas ignition
components, by giving us a range of spark generators, and offers us the
opportunity to replicate Derlite's success by marketing Kigass' products more
competitively in international markets.'
For any further information please contact,
Patrick Rogers, Executive Chairman
Buckland Group plc
Tel. 07711 420 702
John Depasquale
Seymour Pierce Limited
Tel: 020 7107 8010
Paul Foulger / Ben Simons
Hansard Communications
Tel. 020 7245 1100
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