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Silverdell Plc Acquisition of Kitsons Group Limited |
| 01/08/2007 |
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Silverdell Plc, a leading UK supplier of asbestos contracting and consultancy services, today announces the acquisition (the “Acquisition”) of the entire issued share capital of Kitsons, a well established industrial asbestos contracting business, for a total consideration of £14m on a “debt free, cash free” basis, thereby creating a truly nationwide specialist asbestos services provider.
The consideration will be satisfied as follows: £4m drawn from an existing facility with Barclays Bank; £8m from an equity placing of 5.33m new ordinary shares at 150 pence per share to institutional investors; and £2m to be satisfied by the issue of 1.33m new ordinary shares at 150 pence per share. The new ordinary shares issued in connection with the Acquisition and the placing will rank pari passu in all respects with the existing ordinary shares and are expected to be admitted to trading on AIM at 0800 on 1 August 2007. Expenses relating to the Acquisition will be met from existing cash resources.
The audited accounts of Kitsons Environmental Europe Limited, Kitsons’s trading subsidiary, for the year ended 31 December 2006 show turnover of £18.7m (2005: £16.6m), EBITDA of £1.7m (2005: £0.8m) and EBIT of £1.5m (2005: £0.6m). The consideration of £14m payable at completion represents a multiple of 2006 EBITDA of 8.2.
Kitsons provides asbestos removal, insulation and scaffolding services to the nuclear, petrochemical and retail sectors, among others. Kitsons’s blue chip customer base includes an oil major, leading UK utilities, major building contractors as well as local authorities. Kitsons has a 3 year asbestos licence and a hazardous waste carrying permit as well as ISO 9001, 14001 and 18001 accreditations. A significant proportion of Kitsons’s revenue is underpinned by long term agreements.
Kitsons has approximately 270 staff and is head quartered in Warrington with regional offices in Glasgow, Teesside and Birmingham and resident sites at Aldermaston and Pembroke.
The Acquisition further strengthens the Company’s service offering by combining three leading brands in the asbestos services industry: removal and remediation in the commercial (Silverdell (UK)) and industrial (Kitsons) sectors; and asbestos consulting and air monitoring (Redhill Analysts). Following the Acquisition, Silverdell has achieved its key strategic goal of nationwide capability which includes a presence in high growth, specialist industrial sectors such as nuclear.
Kitsons has an experienced operational management team led by Andy Watson, who will be responsible for the day to day management of Kitsons and for growing and developing the business. Peter Dolan, the vendor, will remain with Kitsons on a consultancy basis.
The integration of Kitsons will commence immediately and the Company should benefit from a number of cost synergies including the sharing of resources, combined purchasing power and the local sourcing of labour. The Directors believe there are also significant cross selling opportunities through leveraging new and existing customer relationships between the three businesses, which management of Silverdell intend to focus on particularly.
Danny Spicer, Chief Executive of Silverdell, commented:
“This is a very exciting acquisition for Silverdell as it enhances our capabilities as the UK’s leading, nationwide asbestos services provider as well as giving us access to high growth, industrial markets. In addition, the Company continues to execute on its strategy to consolidate the fragmented asbestos services market. Kitsons is an excellent business with exciting growth prospects and we look forward to welcoming its staff into the business.”
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