Information  X 
Enter a valid email address

Jacobs Holdings PLC (BID)

  Print   

Wednesday 04 October, 2000

Jacobs Holdings PLC

Disposal

Jacobs Holdings PLC
4 October 2000


                  JACOBS HOLDINGS PLC ('JACOBS')
                                 
      Sale of Ontime Logistics business to Fastrack Group Plc
                                                                  
Jacobs announces today that it has entered into an agreement ('the
Agreement')  to sell the trade and assets of its Ontime  Logistics
business  ('Ontime')  to  Fastrack Group Plc  ('Fastrack')  for  a
consideration  of the issue to Jacobs of 61,548,387  new  ordinary
shares  in the share capital of Fastrack ('Fastrack Shares').   In
addition,  Jacobs has today subscribed for 6,451,613 new  Fastrack
Shares at a price of 7.75 pence per share, being the closing  mid-
market price on 3 October 2000.

It  is  also  proposed that Fastrack grant to  each  of  Goldpower
Limited,  the  majority  shareholder in Fastrack  Group  Plc,  and
Jacobs  put  and  call  options in each case over  12,903,226  and
10,526,316 Fastrack Shares respectively which will enable Fastrack
to raise up to £2 million in further funding at various times over
the next 2 years.

Jacobs  will  also guarantee the obligations of Fastrack  to  HSBC
Bank plc in an amount of £2 million.  In the event of a call being
made  under this guarantee, the amount of the call will either  be
reimbursed in cash by Fastrack to Jacobs, or at Fastrack's option,
satisfied by the allotment of new Fastrack Shares, having a value,
at  a  subscription price of the lower of 7.75 pence per share  or
the closing market price on the day preceding the date of the call
(subject to a minimum of nominal value), equal as nearly as may be
to the amount of the call.

On completion Jacobs will have an interest in approximately 34 per
cent  of  the enlarged capital of Fastrack.  Assuming that  Jacobs
were  to  acquire the maximum potential number of Fastrack  Shares
under  the option and bank guarantee arrangements outlined  above,
Jacobs  could  be  interested in a  maximum  of  48  per  cent  of
Fastrack's  share  capital.  The agreement is conditional  on  the
approval of Fastrack Shareholders to waive Jacobs' requirement  to
make  a  general  offer  for the entire issued  share  capital  of
Fastrack as a result of the Agreement.

Ontime   provides  both  domestic  express  parcel  delivery   and
international freight forwarding services to a range of  business-
to-business  customers.   The business transferred  will  comprise
cash,  fixed assets, stock, debtors and creditors, Ontime  package
tracking  software  and  subsisting  contractual  commitments   of
Ontime.

All  the  existing stakeholders (franchisees) in  Ontime  will  be
offered a transfer to the enlarged Group.

The  sale  of the business and assets to Fastrack will assist  the
enlarged Fastrack group to achieve the critical mass necessary  to
move  both  its  and Ontime's existing businesses  into  sustained
profitability.   Of  particular benefit to the  enlarged  business
should be the combination of Ontime's international sales base and
business-to-business contracts with the larger domestics  business
currently enjoyed by Fastrack.

Jacobs  will continue to benefit from the enlarged business  as  a
substantial  shareholder in the enlarged  Fastrack  group,  whilst
avoiding  the  continuing  expense of  developing  over  time  the
existing Ontime business to achieve the critical mass required.

The  business  and  assets of Ontime have a  net  asset  value  of
approximately £3.5 million together with unamortised  goodwill  of
approximately £1.7 million.  For the year to 31 December, 1999 the
losses  attributable  to Ontime were approximately  £5.9  million,
inclusive of start-up and development costs.

Following completion of the Agreement, it is proposed that Michael
Kingshott,  the Managing Director of Jacobs, will be appointed  to
the Board of Fastrack as a non-executive director.

Commenting  on the sale of Ontime to Fastrack, Michael  Kingshott,
Jacobs' Managing Director said:

'After  thoroughly examining the relative cost  of  continuing  to
develop Ontime as an independent business against its merger  with
a  similar  business,  we have concluded that  the  critical  mass
required  to  produce  an  acceptable financial  return  would  be
achieved  in a significantly shorter period of time, and  at  less
cost to Jacobs shareholders, through the merger route.

'The  merged group will provide a more efficient national  service
from  the enlarged network of 71 depots operating a fleet  of  500
vehicles.   This  represents a considerable increase  in  Ontime's
existing fleet of 120 vehicles operating out of 22 depots.

'It  is  the  intention  of  Jacobs to retain  its  investment  in
Fastrack Group Plc as a strategic long term holding.'


ENQUIRIES:

Jacobs Holdings plc                      Tel:  020 7408 0123
Michael Kingshott, Managing Director

Investec Henderson Crosthwaite           Tel:  020 7597 5970
James Grace

College Hill                             Tel:  020 7457 2020
Gareth David                             Email:  [email protected]
Lisa Pearson                             Email: [email protected]



                                                                   

a d v e r t i s e m e n t