Acquisitions
June 30 2010 - 2:00AM
UK Regulatory
TIDMDWHT
RNS Number : 4210O
Dewhurst PLC
30 June 2010
Dewhurst PLC (the "Company" or "Dewhurst")
Acquisition of stakes in Elevator Research & Manufacturing Corp. and Winter &
Bain Manufacturing, Inc.
Dewhurst PLC, an independent supplier of quality components to the lift, keypad
and rail industries, is pleased to announce the acquisition of stakes in
Elevator Research & Manufacturing Corp. ("ERM") and Winter & Bain Manufacturing,
Inc. ("W&B"), both Californian corporations which specialise in the elevator
market.
ERM is a fixture and controller manufacturer which provides a range of products
to the elevator market. W&B supplies elevator cabs, hydraulic packages and
related parts to the elevator industry. Both companies are under common
ownership.
The acquisition of these stakes in ERM and W&B demonstrates the Company's
commitment to continue to expand its international operations. Part of the
Company's strategy over recent years has been to seek to add additional fixture
businesses around the world that can act as an outlet for sales of the Company's
components and add value with local supplies and support for customers. The
Company also aims to sell a wider range of products to its existing customers.
The ERM acquisition provides an additional fixture business for the Company in
the established market of the US west coast. ERM is already a customer of
Dewhurst, so this acquisition will not generate additional component sales, but
it will secure those sales. The W&B acquisition provides Dewhurst with the
ability to sell complementary products to customers across the North American
market.
The key terms of the deal are as follows:
· The Company has acquired the stakes of Lynn Park (held by Lynn and
Susanne Park Trust) in ERM (25%) and W&B (41.67%) for a total cash consideration
of US$1million with effect from 1 July 2010. Lynn Park will retire from the
business and has agreed to certain restrictive covenants for a period of 3
years.
· The Company has also agreed with the two remaining shareholders in ERM
and W&B, Ed Park (shares held in the name of Frank Edward Park Revocable
Separate Property Trust) and Clive Mann (shares held in the name of Mann Family
Trust), that it shall purchase their entire shareholdings in ERM and W&B no
later than 1 July 2014. There are also provisions in the agreement for Dewhurst
to purchase this balance of the shares in ERM and W&B earlier in certain
circumstances, such as the death or disability of Ed Park and Clive Mann. The
consideration, to be payable in cash, will be the greater of (a) 3 times the sum
of EBITDA of the best 2 consecutive financial years prior to the sale less net
debt; or (b) $2,017,000 for Park's shares and $1,067,000 for Mann's shares
subject to certain discounts depending on the profit before tax for the
financial years prior to the sale.
· Richard Dewhurst will be appointed as a director of both ERM and W&B.
Following the sale of Ed Park's and Clive Mann's shares, they may continue to be
employed in the business for 12 months, and will be on 12 months' notice,
following which they will be subject to certain restrictive covenants.
In the year ended 31 December 2008 (the most recent filed financial
information), ERM made a profit before tax of US$445,421 on turnover of
approximately US$4,932,222 and W&B made a profit before tax of US$213,281 on
turnover of approximately US$4,697,748.
The acquisition of the stakes in ERM and W&B, due to its size relative to the
Company, is deemed to be a substantial transaction under the AIM Rules.
Commenting on the acquisition, Richard Dewhurst, Chairman of the Company, said:
"We have known the management team at ERM and W&B for many years and believe we
share many common values. Adding these businesses to the Dewhurst group should
enable us to grow our market share in the important US market. As ERM already
uses Dewhurst components the business should be relatively easy to assimilate
into the group in due course. Clive Mann used to work for the Company's
Canadian subsidiary and I will look forward to working with him again. I also
look forward to working with Ed Park who is a highly respected member of the
North American Elevator industry."
For further details please contact:
+------------------------------------+------------------------+
| Dewhurst Plc | Tel: +44 (0) 208 607 |
| | 7364 |
+------------------------------------+------------------------+
| Jared Sinclair | |
+------------------------------------+------------------------+
| Seymour Pierce Ltd | Tel: +44 (0) 207 107 |
| | 8000 |
+------------------------------------+------------------------+
| Nicola Marrin/Stewart Dickson | |
+------------------------------------+------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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