Acquisition
Mavinwood PLC
27 March 2007
Mavinwood plc ('Mavinwood')
Acquisition of Document Control Services Limited ('DCS')
Payment of up to £8.3 million including
discharge of indebtedness and contingent consideration
Mavinwood plc (AIM: MVW), the support services company, announces that it has
agreed to purchase the entire issued share capital of Stapledon Holdings Limited
('Stapledon''), the parent company of DCS, a provider of scanning and indexing
services to a range of customers primarily in the infrastructure, oil & gas and
local government sectors. DCS is based in Peterborough and provides a national
service. Following completion, the existing management of DCS will continue to
run the business.
The initial consideration for the acquisition of £1.3 million will be satisfied
as to £0.3 million in cash and £1 million by the issue of 5,405,405 ordinary
shares in the capital of Mavinwood (the 'Consideration Shares'). Application has
been made for the Consideration Shares to be admitted to trading on AIM, which
is expected to take place on 2 April 2007. In addition, Mavinwood will procure
the discharge by Stapledon and DCS ('DCS Group'') of indebtedness amounting to
£5.0 million. Debt funding for the acquisition was provided by the existing
banking group of Allied Irish Banks, p.l.c and Fortis Bank SA/NV.
Contingent consideration up to a maximum £2 million will also be paid dependent
on the performance of DCS. The contingent consideration is payable in cash or
loan notes on the basis of £6.51 of additional consideration for each £1 of
EBITA in excess of £923,000 (up to a maximum EBITA of £1,230,000) to be achieved
by DCS during the year ending 30 June 2008.
In the year ended 30 June 2006, the DCS Group made a consolidated profit before
tax of £71,000 on turnover of £3,289,000. The DCS Group incurred interest of
£467,000 in the year ended 30 June 2006 and £226,000 in relation to goodwill
amortisation and £76,000 in relation to holding company costs, which are not
expected by the Directors of Mavinwood to be recurring costs. The Directors of
Mavinwood therefore consider that the earnings before interest, tax and
amortisation, normalised for non-recurring costs, of the DCS Group for the year
ended 30 June 2006 were £840,000.
At 30 June 2006, the DCS Group had consolidated net liabilities of £1,051,000
after £5,051,000 of bank and other funding.
The acquisition is expected to be earnings enhancing for Mavinwood in the
current financial year.
Kevin Mahoney, Chief Executive of Mavinwood, commented:
'We have been keen to add a scanning and digitisation capability to our very
successful document handling businesses, Restore and Wansdyke. DCS is a
successful and profitable business with quality clients and I am delighted that
all of the senior management team are staying with the operation.
Over the last two years we have built Mavinwood into a growing support services
group with strong positions in both our chosen markets, document handling and
emergency repair. DCS, our sixth large acquisition since we launched as a cash
shell, continues our record of acquiring businesses with good management and
track records of profitable growth.'
Enquiries:
Mavinwood plc
Kevin Mahoney 020 7661 9650
Mike Vincent 020 7661 9651
Collins Stewart Europe Limited
Adrian Hadden 020 7523 8350
Threadneedle Communications
John Coles 020 7936 9604
Background on Mavinwood
Mavinwood was launched on AIM on 5 November 2004 and is pursuing a buy and build
strategy in the support services sector. The strategy is to acquire and develop
support services businesses which have the potential for growth, either
organically or in combination with other complementary businesses. The focus is
on the emergency repair (especially where there is an insured repair) and
document handling sectors.
This information is provided by RNS
The company news service from the London Stock Exchange
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