Dewhurst PLC Disposal of Thames Valley Controls Ltd (4422N)
September 24 2019 - 4:09AM
UK Regulatory
TIDMDWHT
RNS Number : 4422N
Dewhurst PLC
24 September 2019
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
Dewhurst plc ("Dewhurst" or the "Group")
Proposed Disposal of Thames Valley Controls Limited
Dewhurst plc (AIM: DWHT) is pleased to announce that it has
entered into a conditional sale and purchase agreement to sell the
entire issued and outstanding shares in Thames Valley Controls
Limited ("TVC"), the supplier of lift control and monitoring
solutions, to Elevation AcquisitionCo LLC, which trades under
Vantage Elevator Solutions ("Vantage") (the "Disposal") for a total
cash consideration of GBP8.0 million on a debt free, cash free
basis payable on completion, and an adjustment for actual versus
targeted working capital on completion. Completion of the Disposal
is expected to occur on 30 September 2019.
Commenting on the Disposal, Richard Dewhurst, Chairman of
Dewhurst, said:
"We have worked with Vantage on lift fixtures in North America
and distribute some of their product ranges in Australia, so we
have known the people in that business for many years. We will be
sad to lose TVC as part of the Dewhurst Group, but believe that
Vantage will provide TVC with greater opportunities to grow and
prosper, through their greater scale in the lift controller
business."
Background to and reasons for the Disposal
TVC has been part of the Dewhurst Group for over 25 years, which
is a little over half its lifetime. For at least the last 20 of
those years TVC has been profitable. Despite this success, we have
been mindful in the last few years that the cost and complexity of
developing each new generation of lift controller and lift
monitoring system has been rising and our sales volumes for these
products are relatively small on a global basis. As a result and
from time to time, we have assessed the possibility of partnering
with other businesses to share the research and development
expenditure.
Vantage is a leading North American independent manufacturer of
elevator components and systems for new equipment applications,
equipment upgrade projects and service replacement parts. Vantage
manufactures and supplies lift controllers through its GALaxy and
Pixel brands and has extensive research and development
capabilities that will benefit TVC's ongoing growth. Founded in
1927, Vantage is headquartered in the Bronx, New York and employs
approximately 1,000 staff in multiple locations across the United
States and Canada.
Dewhurst's Board believes that the Disposal is in the best
interests of Dewhurst's shareholders for the following key
reasons:
-- it represents an attractive opportunity to crystallise the
current value of TVC for shareholders;
-- it eliminates the inherent risks and costs in developing the next generation of products;
-- lift controllers and monitoring are not products that
Dewhurst sell elsewhere in the Group; and
-- it provides funds for potential investment in future acquisitions.
A condition of the Disposal is a Flexible Apportionment
Arrangement (FAA) to transfer TVC's defined benefit pension scheme
obligations to Dewhurst plc. The Dewhurst Board believe this
transfer will not have a material effect on the Group's liability
for the pension scheme as Dewhurst plc is the principal employer
and had ultimate responsibility for servicing these liabilities
anyway. The terms of the FAA provide for GBP1.1 million of the sale
proceeds to be transferred to the Dewhurst plc defined benefit
pension scheme, reducing the scheme's deficit. The amount to be
transferred to the pension scheme has been agreed with the
Trustees, who have taken independent financial and legal advice to
confirm that the FAA meets the Pensions Regulator's funding test
and that the Disposal is not considered likely to be materially
detrimental to the ability of the principal employer (i.e.
Dewhurst) to continue to fund the scheme.
Financial effects of the Disposal
During the financial year ended 30 September 2018, TVC generated
revenues of GBP8.8 million and operating profit of GBP0.7
million.
The net assets of TVC as at 31 March 2019, on a debt free, cash
free basis were approximately GBP1.7 million.
Accordingly, net assets of the Group (excluding the effect of
any working capital adjustment required on completion) are expected
to increase by approximately GBP6.3 million due to the cash
consideration exceeding the net assets of TVC.
Board change
As a result of the Disposal and with effect from the date of
completion, Richard Young, Managing Director of TVC, will step down
from the Board of Dewhurst plc.
For further details please contact:
Dewhurst plc Tel: +44 (0) 208 744 8200
Richard Dewhurst, Chairman
Jared Sinclair, Finance Director
www.dewhurst.plc.uk
Cantor Fitzgerald Europe Tel: +44 (0) 207 894 7000
David Foreman / Will Goode (Corporate Finance)
Caspar Shand Kydd (Sales)
Person responsible:
The person responsible for arranging the release of this
announcement on behalf of Dewhurst plc is Jared Sinclair.
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END
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