DATE: 14th January 2005
Business Direct Group plc (BDG.L), the developer and operator of the ParcelXchange intelligent locker distribution system, has acquired the assets, trade, customers and goodwill (the "Businesses") of Concord Couriers Ltd ("CCL"), Concord Logistics Ltd ("CLL"), Concord Welwyn Garden City Ltd ("CCWG") and the entire issued share capital of Bcomp 236 Limited ("Bcomp"), a company which had the benefit of a management contract to run the above businesses, for a total maximum consideration of £2 million to be satisfied in cash and shares. The three businesses will provide services which have previously been outsourced by Business Direct, including full service logistics, trunking, engineer boot deliveries and warehousing. By bringing these services 'in-house' Business Direct will have greater control over its logistics offering as well as access to an existing customer base including Xerox, Computacenter, Cable £ Wireless, St. Ives and Reed Employment, creating a number of cross-selling opportunities between the two businesses. They will also provide Business Direct with an enlarged infrastructure, two call centres and four delivery depots, without the cost of establishing a new network. The consideration in respect of the acquisition of the Businesses has been satisfied by the payment of £100,000 in cash. Consideration for the acquisition of shares in Bcomp is to be satisfied by the allotment to the shareholders of Bcomp of 3,074,400 new ordinary shares in the Company representing approximately 10% of the Company's enlarged issued share capital equity, to the shareholders of Bcomp 236 Limited. These shares will be subject to a two year lock in and a two year orderly market agreement. Application has been made for these new shares to be admitted to trading on AIM which is expected to take place on 20 January 2005. Business Direct will also pay an additional sum of up to £360,000 in deferred conditional consideration to the shareholders of Bcomp if the Businesses meet certain turnover and profit criteria over the next 3 years. The companies had been placed into administration as a result of losses incurred at a related company, NCN Limited, which is also in administration. The three companies have been historically providing resources to NCN Limited which has resulted in losses being incurred in their own businesses. The six directors of the Concord companies have also been granted options over 1,049,850 shares in the Company at an exercise price of 45p per share. The exercise of the share options is subject to the Businesses achieving a total turnover of £18 million for the year ended 31 December 2005 or £20 million for the year ended 31 December 2006 with a 7.5% EBIT being achieved in each such year. The combined current turnover for CCL and CLL for the year ended 31 May 2004 was £15.1 million with a pre-tax loss of £105,000. CWGC is not included in these figures as it was a franchisee of CCL. The management of the businesses believe that these targets are achievable for the following reasons: Cost reductions at the enlarged group are expected to be achieved via the consolidation of back office departments, a rationalisation of call centres, depots and offices. Following the acquisitions, the Group will have nine depots spread across the UK. It is intended that further acquisitions of individual depots will be made in areas where Business Direct requires a presence. As part of the Group's strategy to have a national spread, further acquisitions of individual offices may also be made. Geographical areas that will require profit generating offices and In-Night depots include the South West, Midlands and North East. Tim Houstoun, Chief Executive Officer of Business Direct, said: "We have been looking at the Concord Business for some time as a potential acquisition, and were able to make an immediate offer which the Administrators saw was in the best interests of all parties". "The acquisitions will give Business Direct an immediate infrastructure which would have otherwise taken significant investment and a number of years to build. In addition to ParcelXchange our customers have always required a full service logistics offering which we are now able to provide without outsourcing to the third parties. Now that we can refocus Concord's core operations away from the support function it was giving NCN, we expect the management to meet its targets over the next three years. It also provides us with a wealth of experienced staff and greater business diversification." A pre-close trading update will be provided by the company the week commencing 17 January 2005.
For Further Information: Alison Brindley
Head of Marketing
Business Direct plc
T: +44 (0) 7962 649 629
E: alison.brindley@bdpx.com
| For Media Enquiries: Alison Brindley,
Head of Marketing, Business Direct Group plc +44 (0)7962 649 629 or +44 (0)1788 821 228. alison.brindley@bdpx.com For supporting text and image files: Rachel Parry, Marketing Executive, Business Direct Group plc +44 (0) 1788 821 235 rachel.parry@bdpx.com |
