RNS Number:0858E
Management Consulting Group PLC
19 September 2007
Management Consulting Group PLC
19 September 2007
Not for release, publication, or distribution in or into the United States of
America, Australia, Canada or Japan
FOR IMMEDIATE RELEASE
Management Consulting Group PLC
Proposed acquisition of Kurt Salmon Associates, Inc.
Summary
Management Consulting Group PLC (''MCG'' or the ''Company'' and together with
its subsidiaries, the ''Group''), the international management consultancy
group, today announces that it has entered into a conditional agreement whereby
it will acquire, by way of merger, the entire issued share capital of Kurt
Salmon Associates, Inc. (''KSA''), a leading international management consulting
firm specialising in services to consumer product suppliers, retailers and
health care providers.
The total consideration agreed for the Acquisition is US$125.0 million (#62.7
million), which will be satisfied by the payment of US$75.0 million (#37.6
million) in cash, the issue of 48,278,793 New Ordinary Shares (the number of
which may be adjusted to up to a maximum of 53,643,103 New Ordinary Shares or
down to a minimum of 43,889,812 New Ordinary Shares pursuant to the Share
Consideration Adjustment) and the grant of options over 6,293,124 Ordinary
Shares in exchange for KSA Options (the number of Ordinary Shares the subject of
options may be adjusted to up to a maximum of 7,471,466 Ordinary Shares or down
to a minimum of 5,525,105 Ordinary Shares).
The cash element of the consideration will be funded from a new Euro81,450,000 and
US$111,325,000 multicurrency debt facility which will also be used to refinance
the Group's existing borrowings and to provide further working capital and
acquisition capital.
The Acquisition is in line with the Group's strategy of delivering profitable
and sustainable revenue growth by broadening and deepening its consulting
offerings.
Excluding one-off integration costs and the amortisation of intangibles, the
Board believes that the Acquisition will enhance earnings per share in the year
to 31 December 2008.(1)
The KSA Vendors will, immediately following Completion and assuming there is no
Share Consideration Adjustment, together hold 48,278,793 Ordinary Shares
representing 14.9 per cent. of the Enlarged Share Capital (or 16.3 per cent. if
the Share Consideration Adjustment results in the maximum upwards adjustment in
the number of New Ordinary Shares).
Commenting on today's announcement, Rolf Stomberg, Chairman of MCG, said:
''This acquisition is a key development in the execution of the Group's
strategy. KSA is a well managed and profitable business with growing revenues.
It has a strong foothold in the US, the world's largest consulting market, and a
high quality client base. The combination of this business with our existing
portfolio will benefit all stakeholders.''
Kevin Parry, Chief Executive of MCG, said:
''I am delighted that the KSA management team and staff are joining MCG. The
deal provides a strong platform for further growth. It expands our consulting
offering and geographic reach, deepens our talent pool and creates opportunities
to cross sell our service offerings to the enlarged client base.''
Mark Wietecha, Chairman of KSA, said:
''Our ability to advance the success of clients and drive superior results
stands at an all time high, and becoming part of MCG's worldwide portfolio of
brands strengthens and expands our capabilities. MCG provides KSA access to a
larger base of resources to further advance our vision and strategy as a premier
management consulting firm in an increasingly dynamic global market. We look
forward to working with MCG's management team to further grow and develop KSA's
business for the continued benefit of our clients and employees. ''
Overview of KSA
KSA is headquartered in Atlanta and has a network of offices throughout North
America. It has operations in Europe and Asia and partnership relationships in
India and Spain. The Group employs approximately 550 people and was ranked as
one of the ''Ten Best Consulting Firms to Work For'' by Consulting Magazine in
each of the six years from 2002-2007.
KSA operates through two divisions: the Consumer Products and Retail Division
and the Health Care Division. The Consumer Products and Retail Division operates
internationally, principally in North America, Europe and the Asia Pacific
region. The Health Care Division operates primarily in the United States.
The Consumer Products and Retail Division consults on business growth, inventory
efficiency, margin management, productivity improvement, technology
effectiveness programmes and supply chain management. Its services address
strategy, processes, organisation and technology support in the core areas of
merchandising, inventory and supply management. Clients include AEON, Carrefour,
The Home Depot, J Sainsbury, Macy's, Proctor & Gamble, Sara Lee and Wal-Mart.
The revenues of the Consumer Products and Retail Division in the year ended 31
December 2006 were approximately US$125 million, approximately 66 per cent. of
which related to the United States, approximately 25 per cent. to Europe and
approximately 9 per cent. to the Asia Pacific region.
The Board believes that the size of the global markets for consulting services
to the consumer products and retail industry sectors is approximately US$12
billion and US$13 billion respectively and that the growth in those markets will
be between six and ten per cent. per annum over the next three years.
The Health Care Division consults on strategy, facility planning and IT to
hospitals, medical centres and physician group practices. Its services address
strategic planning, clinical programme planning, organisation and governance,
facility and operational planning and consulting services related to IT
strategy, system selection, negotiation and project management. Clients are
typically major private sector hospital providers in the United States and
include John Hopkins Hospital, The Mayo Clinic, Cleveland Clinic and the UCLA
Medical Center. The Health Care Division has also provided consulting services
to health care providers in the Middle East including Saudi Arabia, Qatar and
the United Arab Emirates. The revenues of the Health Care Division in the year
ended 31 December 2006 were approximately US$28 million.
The Board believes that the size of the global market for consulting services to
the health care sector is approximately US$25 billion, and that the growth will
be approximately six per cent. per annum over the next three years.
Benefits of the Acquisition
The Board believes that the Acquisition is an important step in the execution of
the Group's strategic goals. In particular, the Board believes the Acquisition
will have the following key benefits:
Operational
* Secures an international market leader in consulting to the consumer
products and retail sectors and a strong health care practice in the United
States
* Broadens the Group's range of industry-led consulting offerings in
sectors where it is not currently strong
* Strong KSA brand raises the Group's profile in the United States, Europe
and Asia
* Deepens the Group's talent pool with internationally experienced
principals
* Increases the Group's client base and enables it to cross sell its
services to that enlarged client base
Geographic
* Rebalances the Group's mix of revenues towards the world's largest
consulting market, the United States, following the acquisition of Ineum
with its substantially European business in 2006
* Provides complementary consulting offerings in geographies where the
Group is already well established
* Increases the Group's Asian presence
* Provides a platform for further development in growing markets
Financial
* Adds a well-managed and profitable business with growing revenues
* Expected to be earnings enhancing in 2008 before one-off integration
costs and the amortisation of intangible assets(2)
* Creates an opportunity to reduce unit infrastructure costs
* Offers a more balanced revenue mix in terms of market and service
offerings and so spreads the risks inherent in the Group over an enlarged
portfolio of businesses
Shareholder approvals
The proposed Acquisition constitutes a Class 1 transaction under the Listing
Rules. Accordingly, it is subject to the approval of Shareholders, which is to
be sought at an Extraordinary General Meeting expected to be held on 11 October
2007.
A circular (also comprising a prospectus for the purposes of Part VI of the
FSMA) (the ''Circular'') containing full details of the proposed Acquisition is
expected to be sent to Shareholders on or shortly after 21 September 2007.
Current trading and prospects
The Board gave an update on trading at the time of its interim results published
on 13 August 2007 and reported that Ineum Consulting's inaugural contribution to
the first half results showed significant like-for-like growth and Proudfoot
Consulting performed slightly better than in the second half of last year.
Parson Consulting's results were mixed. The outlook for the Group has not
changed since that announcement and the Board remains confident that the Group
will show good progress in 2007.
Revenue of KSA for the period from 1 January to 11 August 2007 was approximately
18 per cent. ahead of the comparable period last year.
The Board has a confident outlook for the Enlarged Group's performance for the
remainder of 2007.
The information in this summary should be read in conjunction with the main body
of this announcement.
There will be an analysts' presentation at 9.30 a.m. today at the offices of MCG
on the 6th Floor of Fleet Place House, 2 Fleet Place, Holborn Viaduct, London
EC4M 7RF.
Enquiries
Management Consulting Group PLC
Kevin Parry Chief Executive 020 7710 5000
Chris Povey Head of M&A
Craig Smith Finance Director
Rothschild (financial adviser and sponsor to MCG)
Sian Westerman 020 7280 5000
Dominic Epton
Maitland
Suzanne Bartch 020 7379 5151
Peter Ogden
Morgan Stanley & Co, Incorporated has acted as financial adviser to the
principals of KSA.
N M Rothschild & Sons Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial adviser and
sponsor to MCG and no-one else in connection with the matters referred to herein
and will not be responsible to anyone other than MCG for providing the
protections afforded to clients of N M Rothschild & Sons Limited or for giving
advice in relation to such matters.
The contents of this announcement which have been prepared by and are the sole
responsibility of MCG have been approved by N M Rothschild & Sons Limited solely
for the purposes of section 21(2)(b) of the Financial Services and Markets Act
2000.
This announcement includes statements that are, or may be deemed to be,
''forward-looking statements''. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'',
''continues'', ''expects'', ''intends'', ''may'', ''will'', ''would'' or
''should'', or in each case, their negative or other variations or comparable
terminology. These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this announcement
and include statements regarding the Company's, or the Group's intentions,
beliefs or current expectations concerning, among other things, the Company's,
or the Group's results of operations, financial condition, liquidity, prospects,
growth, strategies and the industries in which the Company or the Group
operates. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances. A number of
factors could cause actual results and developments to differ materially from
those expressed or implied by the forward-looking statements including, without
limitation: conditions in the markets, market position of the Company or the
Group, earnings, financial position, cash flows, return on capital and operating
margins, anticipated investments and capital expenditures, changing business or
other market conditions and general economic conditions. These and other factors
could adversely affect the outcome and financial effects of the plans and events
described in this announcement. Forward-looking statements contained in this
announcement based on past trends or activities should not be taken as a
representation that such trends or activities will continue in the future.
Subject to any requirement of the UK Listing Authority or London Stock Exchange
or as a matter of law, neither MCG nor Rothschild undertakes any obligation to
update or revise any forward looking statements, whether as a result of new
information, future events or otherwise. Undue reliance should not be placed on
forward-looking statements, which speak only as of the date of this
announcement.
The New Ordinary Shares have not been and will not be registered under the
United States Securities Act of 1933, as amended, (the "Securities Act") or
under the securities laws of any state of the United States and may not be
offered or sold, except pursuant to an exemption from, or in a transaction not
subject to the registration requirements of the Securities Act and applicable
state securities laws. This announcement shall not constitute an offer to sell
or the solicitation of an offer to buy the New Ordinary Shares, nor shall there
be any sale of the New Ordinary Shares in any state or other jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction.
The New Ordinary Shares may not be resold unless they are registered under the
Securities Act and applicable state securities laws or an exemption from
registration is available.
Notes to Editors
The Group currently comprises six specialist consultancies: CBH Consulting,
Ineum Consulting, Parson Consulting, Proudfoot Consulting, Salzer Consulting and
Viaduct Consulting.
On 5 September 2007, the Company acquired CBH, a California corporation, by way
of merger for a total consideration of approximately US$10.6 million. CBH
Consulting provides performance management and business intelligence solutions
for enterprises. It assists management to obtain timely accurate and well
presented information on business performance and information in order to make
well informed business decisions. CBH Consulting serves the commercial and
public sectors with particular industry expertise in financial services, health
care and state and local government. It works closely with and is a preferred
partner of Cognos, a corporate performance planning and business intelligence
software provider.
Ineum Consulting provides a range of services to businesses in the private and
public sectors through its dedicated industry groups and offers market,
strategic, functional and technology expertise. Ineum Consulting serves the
financial, manufacturing, utilities, telecoms and media, public and
transportation sectors. It also has a specialist middle market group to meet the
needs of dynamic and growing businesses.
Parson Consulting develops excellence in finance and operations. It assists
chief financial officers by providing valuable financial information and insight
to stakeholders through strategic finance, accounting and finance operations,
governance and risk management, and corporate transaction support. It does not
undertake auditing or resell software and is therefore free of conflicts of
interest.
Proudfoot Consulting implements sustainable operational improvements at no net
annualised cost to its clients through process improvements, People SolutionsTM
and management operating systems. The successful combination of these three
disciplines results in installed change. The change process is project managed
using the proprietary technique of Co-Venture(R) which, through partnership with
Proudfoot Consulting's clients, accelerates the pace of change from the
consulting engagement.
Salzer Consulting markets itself as the partner of choice for companies in the
Asia-Pacific region that are expanding rapidly. It provides human resources
project management and human effectiveness improvement through proven products
and tailor-made solutions and it combines deep commercial knowledge with a sound
cultural understanding of the Asia-Pacific region.
Viaduct Consulting assists private equity providers and corporates in making
investment decisions. It undertakes commercial and operational due diligence and
synergy assessments and critiques market and enterprise growth strategies. The
practice serves defined industry sectors and draws on the expertise available in
other MCG Group consultancies.
The businesses of the MCG Group are primarily focused on the main geographic
markets for consulting services, which are currently North America and Europe,
and, in addition, provide services in other smaller consulting markets such as
Australia, Brazil, China and South Africa.
Management Consulting Group PLC
19 September 2007
Not for release, publication, or distribution in or into the United States of
America, Australia, Canada or Japan.
FOR IMMEDIATE RELEASE
Management Consulting Group PLC
Proposed acquisition of Kurt Salmon Associates, Inc.
1. Introduction
Management Consulting Group PLC (''MCG'' or the ''Company'' and together with
its subsidiaries, the "Group"), the international management consultancy group,
today announces that it has entered into a conditional agreement whereby it will
acquire, by way of merger, the entire issued share capital of Kurt Salmon
Associates, Inc. (''KSA''), a leading international management consulting firm
specialising in services to consumer product suppliers, retailers and health
care providers.
The total consideration agreed for the Acquisition is US$125.0 million (#62.7
million), which will be satisfied by the payment of US$75.0 million (#37.6
million) in cash, the issue of 48,278,793 New Ordinary Shares (the number of
which may be adjusted to up to a maximum of 53,643,103 New Ordinary Shares or
down to a minimum of 43,889,812 New Ordinary Shares pursuant to the Share
Consideration Adjustment described below) and the grant of options over
6,293,124 Ordinary Shares in exchange for KSA Options (the number of Ordinary
Shares the subject of options may be adjusted to up to a maximum of 7,471,466
Ordinary Shares or down to a minimum of 5,525,105 Ordinary Shares pursuant to an
adjustment mechanism described below).
The cash element of the consideration will be funded from a new Euro81,450,000 and
US$111,325,000 multicurrency debt facility which will also be used to refinance
the Group's existing borrowings and to provide further working capital and
acquisition capital.
The proposed Acquisition constitutes a Class 1 transaction under the Listing
Rules. Accordingly, it is subject to the approval of Shareholders, which is to
be sought at the Extraordinary General Meeting.
The Acquisition is in line with the Group's strategy of delivering profitable
and sustainable revenue growth by broadening and deepening its consulting
offerings.
The KSA Vendors will, immediately following Completion and before the effect of
any Share Consideration Adjustment, together hold 48,278,793 Ordinary Shares
representing 14.9 per cent. of the Enlarged Share Capital (or 16.3 per cent. if
the Share Consideration Adjustment results in the maximum upwards adjustment in
the number of New Ordinary Shares, or 13.8 per cent. if the Share Consideration
Adjustment results in the maximum downwards adjustment in the number of New
Ordinary Shares).
2. Information on MCG
The Group currently comprises six specialist consultancies: CBH Consulting,
Ineum Consulting, Parson Consulting, Proudfoot Consulting, Salzer Consulting and
Viaduct Consulting.
On 5 September 2007, the Company acquired CBH, a California corporation, by way
of merger for a total consideration of approximately US$10.6 million. CBH
Consulting provides performance management and business intelligence solutions
for enterprises. It assists management to obtain timely, accurate and well
presented information on business performance and information in order to make
well informed business decisions. CBH Consulting serves the commercial and
public sectors with particular industry expertise in financial services, health
care and state and local government. It works closely with and is a preferred
partner of Cognos, a corporate performance planning and business intelligence
software provider.
Ineum Consulting provides a range of services to businesses in the private and
public sectors through its dedicated industry groups and offers market,
strategic, functional and technology expertise. Ineum Consulting serves the
financial, manufacturing, utilities, telecoms and media, public and
transportation sectors. It also has a specialist middle market group to meet the
needs of dynamic and growing businesses.
Parson Consulting develops excellence in finance and operations. It assists
chief financial officers by providing valuable financial information and insight
to stakeholders through strategic finance, accounting and finance operations,
governance and risk management, and corporate transaction support. It does not
undertake auditing or resell software and is therefore free of conflicts of
interest.
Proudfoot Consulting implements sustainable operational improvements at no net
annualised cost to its clients through process improvements, People SolutionsTM
and management operating systems. The successful combination of these three
disciplines results in installed change. The change process is project managed
using the proprietary technique of Co-Venture(R) which, through partnership with
Proudfoot Consulting's clients, accelerates the pace of change from the
consulting engagement.
Salzer Consulting markets itself as the partner of choice for companies in the
Asia-Pacific region that are expanding rapidly. It provides human resources
project management and human effectiveness improvement through proven products
and tailor-made solutions and it combines deep commercial knowledge with a sound
cultural understanding of the Asia-Pacific region.
Viaduct Consulting assists private equity providers and corporates in making
investment decisions. It undertakes commercial and operational due diligence and
synergy assessments and critiques market and enterprise growth strategies. The
practice serves defined industry sectors and draws on the expertise available in
other MCG Group consultancies.
The businesses of the MCG Group are primarily focused on the main geographic
markets for consulting services, which are currently North America and Europe,
and, in addition, provide services in other smaller consulting markets such as
Australia, Brazil, China and South Africa.
3. Background to, and reasons for, the Acquisition
The Group's strategy is to:
* operate and continually invest in its consultancies and its people to
deliver profitable, sustainable revenue growth that is ahead of the market
rates of growth for the consulting sector; and
* acquire consultancies that either diversify the range of consulting
offerings available to clients or deepen the coverage of existing Group
offerings. Each consulting offering goes to market through its own brand and
is operated separately with its own dedicated management team.
Group management co-ordinates the introduction of clients as between the
different offerings, provides oversight of key client relationships and broadens
the range of consulting offerings available to clients by shaping consultancies'
strategies and by acquisitions. The Group management additionally determines the
investment priorities and provides expert financial and other infrastructure
skills and assets.
The proposed Acquisition secures a high quality consulting practice focused on
the retail, consumer products and health care industries. It will broaden the
client base of, and services provided by, the MCG Group and provides the
opportunity for the clients of KSA to be introduced to the Group's other
consultancies and for clients of the MCG Group to be introduced to the services
of KSA.
KSA provides the Group with a further major consulting offering focusing on
industry specialisms. Its industry led business will continue to trade under the
KSA brand.
MCG will continue to invest in its existing consulting offerings through
recruitment of suitably qualified and experienced people and will continue to
seek bolt-on acquisitions of suitable management consulting and professional
services businesses.
4. Benefits of the Acquisition
The Board believes that the Acquisition is an important step in the execution of
the Group's strategic goals. In particular, the Board believes the Acquisition
will have the following key benefits:
Operational
* Secures an international market leader in consulting to the consumer
products and retail sectors and a strong health care practice in the United
States
* Broadens the Group's range of industry-led consulting offerings in
sectors where it is not currently strong
* Strong KSA brand raises the Group's profile in the United States, Europe
and Asia
* Deepens the Group's talent pool with internationally experienced
principals
* Increases the Group's client base and enables it to cross sell its
services to that enlarged client base
Geographic
* Rebalances the Group's mix of revenues towards the world's largest
consulting market, the United States, following the acquisition of the
substantially European Ineum business in 2006
* Provides complementary consulting offerings in geographies where the
Group is already well established
* Increases the Group's Asian presence
* Provides a platform for further development in growing markets
Financial
* Adds a well-managed and profitable business with growing revenues
* Expected to be earnings enhancing in 2008 before integration costs and
the amortisation of intangible assets(3)
* Creates an opportunity to reduce unit infrastructure costs
* Offers a more balanced revenue mix in terms of market and service
offerings and so spreads the risks inherent in the Group over an enlarged
portfolio of businesses
5. Information on KSA
Background
KSA is a leading international management consulting firm operating through two
divisions: the Consumer Products and Retail Division and the Health Care
Division. The business was founded in Washington, D.C. in 1935 and has its
global headquarters in Atlanta.
Operations
The Consumer Products and Retail Division operates internationally, principally
in North America, Europe and the Asia Pacific region. The Health Care Division
operates primarily in the United States.
Over the course of 2005 and 2006, the Consumer Products and Retail Division
completed a restructuring of its operations and its consulting offerings that
included the withdrawal from certain consulting activities associated with IT
services. The impact of this period of restructuring was reflected in the
reported revenues and operating profits of the KSA business in the three years
ended 31 December 2004, 2005 and 2006. The revenues of KSA increased by 8.4 per
cent. from US$141.1 million in 2005 to US$152.9 million in 2006.
The Consumer Products and Retail Division consults on business growth, inventory
efficiency, margin management, productivity improvement, technology
effectiveness programmes and supply chain management. Its services address
strategy, processes, organisation and technology support in the core areas of
merchandising, inventory and supply management. Clients include the full
spectrum from suppliers to retailers, including within the last five years 30 of
the 50 largest global retailers. Its clients include, for example, AEON,
Carrefour, The Home Depot, J Sainsbury, Macy's, Procter & Gamble, Sara Lee and
Wal-Mart, together with private equity firms that are active in this industry
sector. The revenues of the Consumer Products and Retail Division in the year
ended 31 December 2006 were approximately US$125 million, approximately 66 per
cent. of which related to the United States, approximately 25 per cent. to
Europe and approximately 9 per cent. to the Asia Pacific region.
The Health Care Division consults on strategy, facility planning and IT to
hospitals, medical centres and physician group practices. Its services address
strategic planning, clinical programme planning, organisation and governance,
facility and operational planning and consulting services related to IT
strategy, system selection, negotiation and project management. Clients are
typically major private sector hospital providers in the United States such as
academic medical centres, community hospitals, children's hospitals and
physician groups and include all of the 2001-2006 US News & World Report ''Honor
Roll'' institutions such as John Hopkins Hospital, The Mayo Clinic, Cleveland
Clinic, Massachusetts General Hospital, UCLA Medical Center and the Children's
Hospital of Philadelphia. The Health Care Division has also provided consulting
services to health care providers in the Middle East including Saudi Arabia,
Qatar and the United Arab Emirates. The revenues of the Health Care Division in
the year ended 31 December 2006 were approximately US$28 million.
KSA operates from a network of offices in North America: Atlanta, Los Angeles,
Mexico City, Minneapolis, New York, Philadelphia, Princeton, San Bruno and San
Francisco; from four countries in Europe (France, Germany, the Netherlands and
the United Kingdom); and from two countries in Asia (China and Japan). KSA
additionally has collaboration arrangements with consultancies in India and
Spain.
The Board believes that the size of the global markets for consulting services
to the consumer products and retail industry sectors is approximately US$12
billion and US$13 billion respectively and that the growth in those markets will
be between six and ten per cent. per annum over the next three years.
The Board further believes that the size of the global market for consulting
services to the health care sector is approximately US$25 billion, and that the
growth will be approximately six per cent. per annum over the next three years.
Management and employees
The employees of the KSA business who are also shareholders are referred to as
"principals". There are currently 77 principals who in aggregate own 100 per
cent of the common stock of KSA.
The KSA Group employs approximately 550 people working in six languages. KSA was
ranked as one of the ''Ten Best Consulting Firms to Work For'' by Consulting
Magazine in each of the six years from 2002-2007.
6. Summary financial information on KSA
KSA had consolidated gross assets as at 31 December 2006 of US$86.8 million and
profits before tax for the year ended 31 December 2006 of US$9.4 million (as
extracted from KSA's audited IFRS accounts for the year ended 31 December 2006).
The revenue, operating profit (before and after restructuring and exceptional
bad debt charges) and operating profit margin (before restructuring and
exceptional bad debt charges) for the three years ended 31 December 2006, which
are presented in accordance with International Financial Reporting Standards,
are summarised below.
Years ended 31 December
2004 2005 2006
US$'000 US$'000 US$'000
Revenue 156,925 141,070 152,936
Operating profit before restructuring
and exceptional bad debt charges 12,567 7,515 12,794
Operating profit after restructuring
and exceptional bad debt charges 8,412 1,830 10,610
Operating profit margin before restructuring
and exceptional bad debt charges 8.0% 5.3% 8.3%
The Circular will contain audited financial information on KSA for the three
years ended 31 December 2006.
7. Financial effects of the Acquisition
MCG proposes to finance the Acquisition from new bank borrowing facilities and
through the issue of the New Ordinary Shares to the KSA Vendors and by granting
options over Ordinary Shares in exchange for KSA Options.
It is envisaged that one-off costs (excluding fees in relation to the
Acquisition) estimated to amount to #4 million in aggregate associated with the
integration of KSA into the Enlarged Group will be incurred in the financial
year ending 31 December 2007 and the two subsequent financial years.
The Acquisition will result in the recognition of intangible assets. In
accordance with IFRS, intangible assets other than goodwill are amortised in the
income statement over their estimated economic life.
Excluding one-off costs and the amortisation of intangibles, the Board believes
that the Acquisition will enhance earnings per share in the year to 31 December
2008. This statement is not intended to constitute a profit forecast and should
not be interpreted to mean that the actual earnings of the Enlarged Group
following the Acquisition will necessarily match or exceed the historic
published earnings.
Excluding one-off costs and the amortisation of intangibles, the Board believes
that if the Acquisition had occurred at the beginning of the year ended 31
December 2006, then it would have had a dilutive impact on the Enlarged Group's
earnings per share in that year.
8. Summary terms of the Acquisition
Summaries of the key terms of the proposed Acquisition are set out below.
Agreement and Plan of Merger
The Agreement and Plan of Merger is dated 18 September 2007. The parties to it
are: (1) MCG, (2) KSA Acquisition Corporation, (3) KSA Subco Corporation and (4)
the Stockholder Representative (as defined in the Agreement and Plan of Merger).
Under the Agreement and Plan of Merger, MCG has conditionally agreed to acquire
KSA by way of merger under Delaware law. This will involve a two step process.
In the first step, a new Delaware subsidiary of MCG will merge into KSA, with
KSA being the surviving corporation. In the second step, KSA will merge into a
new Delaware corporation that is a subsidiary of MCG, with that corporation
being the surviving entity and the KSA operating entity going forward. As a
result of these steps, the current KSA entity will dissolve and the corporation
will hold all of the business, assets and liabilities of KSA.
The total consideration agreed for the Acquisition is US$125.0 million (#62.7
million), which will be satisfied by the payment of US$75.0 million (#37.6
million) in cash, the issue of 48,278,793 New Ordinary Shares (the number of
which may be adjusted to up to a maximum of 53,643,103 New Ordinary Shares or
down to a minimum of 43,889,812 New Ordinary Shares pursuant to the Share
Consideration Adjustment described below) and the grant of options over
6,293,124 Ordinary Shares in exchange for KSA Options (the number of Ordinary
Shares the subject of options may be adjusted to up to a maximum of 7,471,466
Ordinary Shares or down to a minimum of 5,525,105 Ordinary Shares pursuant to an
adjustment mechanism described below).
The number of the New Ordinary Shares being issued is, subject to adjustment,
48,278,793, which number was calculated by reference to (i) the price per
Ordinary Share resulting from taking the average mid-market Closing Price over
the 30 trading days prior to the signing of the Agreement and Plan of Merger on
18 September 2007 and (ii) the average Sterling/US$ exchange rate, as published
in the UK edition of the Financial Times, for the 30 trading days prior to the
signing of the Agreement and Plan of Merger on 18 September 2007. The adjustment
in the number of New Ordinary Shares referred to above may arise depending on
the movement in the share price of Ordinary Shares and the movement in the
Sterling/US$ exchange rate between signing of the Agreement and Plan of Merger
and Completion. However, no such adjustment will be made for any price
fluctuation in excess of 10 per cent. The maximum amount of New Ordinary Shares
that could be issued as a result of the adjustment mechanism is 53,643,103. The
number of New Ordinary Shares issued could also, as a result of the adjustment
mechanism, be reduced to a minimum of 43,889,812.
Completion is conditional upon, inter alia:
* the passing of resolutions necessary to approve the Acquisition and to
authorise the issue of the New Ordinary Shares;
* approval of the merger transaction by the KSA common stockholders; and
* the expiration or termination of any applicable waiting period under the
United States Hart Scott Rodino Antitrust Improvements Act of 1976.
Completion will take place shortly after satisfaction of the above conditions
precedent, and is expected to occur on 16 October 2007. Admission of the New
Ordinary Shares to the Official List and to trading on the London Stock
Exchange's market for listed securities is intended to occur on the first
business day after Completion.
KSA is providing certain representations and warranties relating to the business
and affairs of KSA in favour of MCG. The warranties provided by KSA are
customary for a transaction of the nature and type of the Acquisition.
The KSA Vendors' liability in respect of the warranties is subject to certain
limitations. In particular, it is subject to an overall aggregate cap of US$5
million. A claim will only lie where the amount of loss in respect of a single
claim or series of claims exceeds US$5,000 and where the aggregate liability
exceeds US$1 million. The KSA Vendors will have no liability for a breach of
warranty unless MCG provides them with a notice of claim: (i) prior to the
expiration of the applicable statute of limitations period in respect of certain
matters, including tax matters, or (ii) by 31 March, 2009 for all other matters.
The Agreement and Plan of Merger also contains certain limited representations
and warranties by MCG in relation to authorisation, execution and issue of the
New Ordinary Shares with an indemnity in favour of the KSA Vendors in a form
similar to that provided by the KSA Vendors in the event of breach.
Each KSA Vendor will continue to be subject to a covenant, for a period of two
years from their date of departure as an employee, not to solicit any customer
accounts with respect to which, at any time during the two year period prior to
such departure, that KSA Vendor was the primary contact or served as the project
manager therefor. In addition, each KSA Vendor will continue to be subject to a
covenant, for a period of 18 months after his departure, not to solicit or
induce any employee of KSA to leave their employment with KSA.
KSA will pay a break fee to MCG in the amount of US$5 million, plus MCG's
accrued fees and expenses, capped in aggregate at US$10 million, in the event
that KSA terminates the Merger Agreement and Plan of Merger in order to accept a
superior proposal.
Stockholders Agreement
The Stockholders Agreement is to be entered into on or shortly before
Completion. The parties to it are the KSA Vendors, MCG and KSA Subco
Corporation. Under the Stockholders Agreement, MCG and the KSA Vendors have
agreed to certain restrictions in respect of the New Ordinary Shares.
Subject to the provisions relating to lock up (certain of which are outlined
below), (i) each KSA Vendor may dispose of up to 50 per cent. of his New
Ordinary Shares after the fourth anniversary but prior to and including the
fifth anniversary of Completion and (ii) after the fifth anniversary of
Completion, all New Ordinary Shares will be released from any restrictions on
disposal.
Each KSA Vendor has agreed to use reasonable endeavours to procure that any
sales of New Ordinary Shares between the fourth anniversary of Completion and
the date falling five years and six months following Completion will be effected
through MCG's brokers. Furthermore the provisions of the Stockholders Agreement
relating to disposals of New Ordinary Shares do not apply, among other things,
to (i) an offer to acquire the entire issued share capital of MCG made on the
same terms in relation to all shares to which it relates, (ii) any disposal
required by an order of a court of competent jurisdiction, (iii) an offer by MCG
to purchase its own shares made on identical terms to all holders of the same
class of share or (iv) a disposal pursuant to the terms of the Share Escrow
Agreement.
In the event that a KSA Vendor ceases to be employed by a member of the Enlarged
Group (except if as a result of termination without cause, retirement, permanent
disability, death, redundancy or resignation for good reason or after the age of
62), that KSA Vendor agrees to pay liquidated damages to MCG equal to the value
of certain of the New Ordinary Shares held by such KSA Vendor on the following
basis (which can be satisfied in cash or by arranging to sell such number of New
Ordinary Shares as are required to satisfy the amount due):
* where the date of that KSA Vendor's employment ceases on or before the
first anniversary of Completion, 75 per cent. of the New Ordinary Shares
issued to him;
* where the date of that KSA Vendor's employment ceases after the first
anniversary but on or before the second, the relevant percentage is 50 per
cent.;
* where the date of that KSA Vendor's employment ceases after the second
anniversary but on or before the third, the relevant percentage is 25 per
cent.
Share Escrow Agreement
The Share Escrow Agreement will be executed on or shortly before the date of
Completion. The parties to it are: (1) the KSA Vendors, (2) MCG and (3) JP
Morgan Chase Bank, National Association (the ''Escrow Agent''). Under the Share
Escrow Agreement, the parties agree that the Escrow Agent will hold share
certificates and stock transfer forms relating to the New Ordinary Shares in
escrow and, in certain circumstances, will release certain of the New Ordinary
Shares for sale, with the proceeds being remitted to MCG.
Option Consideration
KSA Optionholders hold KSA Options under the Kurt Salmon Associates, Inc. 2002
Stock Option and Incentive Plan (the ''KSA Plan''). The following paragraphs
describe the consideration that the
KSA Optionholders will receive in return for the cancellation of their KSA
Options (the ''Option Consideration'').
In return for the cancellation and surrender of approximately 60 per cent (final
percentages are subject to adjustment at Completion based on changes in the
trading price of Ordinary Shares and the US dollar/pound sterling exchange rate,
but subject to the minimum and maximum share issuance limits described in the
Introduction) of the KSA Options held by each KSA Optionholder, each KSA
Optionholder will receive a cash cancellation payment equal to the amount by
which the market value of the KSA Shares under those KSA Options at Completion
exceeds their exercise price. The cash cancellation payments will be paid to the
KSA Optionholders after Completion after the deduction of any amounts of income
tax, employee social security contributions or National Insurance contributions
or other taxes, state taxes or similar charges that are required to be withheld
and accounted to any revenue authorities.
In return for the cancellation and surrender of the remaining KSA Options
(approximately 40 percent), KSA Optionholders will receive new options to
acquire Ordinary Shares (''New Options'') of equivalent value of those KSA
Options. The number of Ordinary Shares over which New Options are granted, and
the exercise price per Ordinary Share under each New Option, will be determined
according to a formula that is designed to ensure that the intrinsic value of a
New Option will, immediately on the option exchange on Completion, be equal to
the intrinsic value of the corresponding KSA Option that has been exchanged.
Accordingly, it is intended that the total market value of the shares subject to
the KSA Options being exchanged will be equal to the total market value,
immediately after the grant of the New Options, of the Ordinary Shares subject
to the New Options. In addition, it is intended that the total amount payable by
the KSA Optionholders to exercise their New Options shall be equal to the total
amount that would have been so payable under the KSA Options being exchanged.
The option exercise price per Ordinary Share under the New Options will be
adjusted to reflect the application of the formula and, as such New Options will
have an intrinsic value immediately on their grant following Completion, will be
granted at a discount to the market value of an Ordinary Share at that time. The
option exercise formula takes into account the Share Consideration Adjustment
and the total number of Ordinary Shares over which New Options may be granted is
subject to the same percentage adjustment.
No New Option will be granted with an exercise price below the nominal value of
an Ordinary Share. If (for any reason, including currency fluctuations) the
strict application of the formula would otherwise lead to a New Option being
granted with an exercise price below the nominal value of an Ordinary Share, the
New Options will be granted with an exercise price of the nominal value of an
Ordinary Share, and the number of shares under option will be increased to
compensate the option holders for the increase in the total exercise price.
Consequently, the holders of New Options will still retain immediately after the
grant of the New Options the same inherent value that they previously had in
their KSA Options immediately before they were exchanged.
The New Options will (apart from the adjustments described above) otherwise
remain subject to the rules of the KSA Plan.
The KSA Plan will be operated by the Board. After the initial exchange of KSA
Options for New Options, no further options may be granted under the KSA Plan.
Only the holders of KSA Options will be granted New Options. The number of
Ordinary Shares issued or issuable pursuant to New Options will not count
towards the plan limits under the Management Consulting Group PLC 1998 Executive
Share Option Scheme (the "1998 Scheme").
Each New Option shall vest and become exercisable according to the vesting
schedule and on the terms specified in relation to the corresponding KSA Option.
Options cannot be exercised after the tenth anniversary of the date the KSA
Option was granted.
If the holder of a New Option ceases to be employed by the Company or a
subsidiary of the Company, the New Option, or such portion of the New Option as
remains unexercised on the date of cessation, shall lapse on the date of
cessation. In the event of a takeover of the Company, the Board may in relation
to each New Option either (i) deem the New Option to be fully vested and
exercisable, or (ii) unilaterally cancel the New Option in exchange either for
such number of Ordinary Shares which the holder of the New Option would have
received had the New Option been exercised on a date fixed by the Board prior to
such takeover or for cash or other property of equivalent value. If no such
determination is made by the Board, and the New Options are not exchanged for
options over the new acquiring company's shares, the New Options shall become
fully vested and exercisable immediately prior to the takeover.
On a variation of the Company's share capital including a capitalisation or
rights issue, the exercise price and the number of Ordinary Shares comprised in
a New Option may be adjusted by the Board. The Board may amend the rules
provided that no amendment may be made which would materially prejudice a
participant's rights under a New Option without the participant's consent. In
addition, no amendment to the advantage of participants may be made to the
provisions relating to maximum period for the exercise of New Options without
the consent of the Shareholders in general meeting. The benefits received under
the New Options are not pensionable.
9. Dilution of ordinary share capital upon completion
Upon Completion and following allotment and issue of the New Ordinary Shares,
and before the impact of the Share Consideration Adjustment, the Enlarged Share
Capital is expected to be 323,535,651 Ordinary Shares (or a maximum of
328,889,961 Ordinary Shares pursuant to the Share Consideration Adjustment) (in
each case assuming no further exercise of options to subscribe for new Ordinary
Shares under the Share Option Scheme). On this basis, the New Ordinary Shares
will represent approximately 14.9 per cent. of the Enlarged Share Capital and
the Existing Ordinary Shares will represent approximately 85.1 per cent. of the
Enlarged Share Capital (or 16.3 per cent. and 83.7 per cent. respectively if the
Share Consideration Adjustment results in the maximum upwards adjustment in the
number of New Ordinary Shares).
Following issue of all of the New Ordinary Shares and assuming (i) no further
exercise of any rights to subscribe for New Ordinary Shares under the Share
Option Scheme and (ii) before the effect of the Share Consideration Adjustment,
existing Shareholders will suffer an immediate dilution of approximately 14.9
per cent. in their interests in the Company (or 16.3 per cent. if the Share
Consideration Adjustment results in the maximum upwards adjustment in the number
of New Ordinary Shares).
10. Employee retention
The Board recognises the importance of retaining key people in the business and
aligning their interests with those of the Shareholders generally. For that
reason, the consideration payable to the KSA Vendors includes New Ordinary
Shares that cannot (subject to certain exceptions) be realised until the fourth
and fifth anniversaries following Completion, as described above in paragraph 8.
11. Current trading and prospects
The Board gave an update on trading at the time of its interim results published
on 13 August 2007 and reported that Ineum Consulting's inaugural contribution to
the first half results showed significant like-for-like growth and Proudfoot
Consulting performed slightly better than in the second half of last year.
Parson Consulting's results were mixed. The outlook for the Group has not
changed since that announcement and the Board remains confident that the Group
will show good progress in 2007.
Revenue of KSA for the period from 1 January to 11 August 2007 was approximately
18 per cent. ahead of the comparable period last year.
The Board has a confident outlook for the Enlarged Group's performance for the
remainder of 2007.
12. Details of banking facilities
MCG has entered into a new committed term facility, comprised of a US$50,600,000
term A facility commitment and a Euro37,000,000 term B facility commitment, and a
committed multicurrency revolving credit facility (RCF), comprised of a
US$60,725,000 RCF A commitment and a Euro44,450,000 RCF B commitment, arranged by
Barclays Capital, HSBC Bank plc and Lloyds TSB Corporate Markets pursuant to a
facilities agreement dated 18 September 2007 between (1) MCG and certain of its
subsidiaries (as original borrowers) (2) MCG and certain of its subsidiaries (as
original guarantors) (3) Barclays Bank PLC as agent, security agent and original
issuing bank (4) Barclays Bank PLC, HSBC Bank plc and Lloyds TSB Bank plc (as
the original lenders) (the ''Facilities Agreement''). A signing arrangement fee
of US$278,313 and Euro203,625 and a drawdown arrangement fee of US$1,113,250 and
Euro814,500 are payable. The commitment fee for the loans is 40 per cent. of the
applicable margin on the undrawn portion of the facilities, the combined
facility and security agency fee is #25,000 per annum and the margin over LIBOR
on the loans is between 0.8 per cent. per annum and 1.5 per cent. per annum
dependent on the ratio of Total Net Debt on the last day of a Relevant Period to
Adjusted EBITDA in respect of that Relevant Period (as such terms are defined in
the Facilities Agreement). The new term loan will be for five years; it will be
available for drawing from the date of the Facilities Agreement for a period of
90 days. The revolving credit facility will be available from the date of the
Facilities Agreement until one week prior to the date falling five years after
the date of the Facilities Agreement.
Further details of the new debt facilities will be set out in the Circular.
13. Dividend policy
The Board intends to continue a progressive dividend policy dependent on the
performance of the underlying business of the Enlarged Group, its debt servicing
requirements and future acquisition opportunities. This statement should not be
construed as a dividend forecast or as a guarantee that any dividends will be
paid in the future. The Board intends for there to be two dividends per annum.
14. Extraordinary General Meeting
An Extraordinary General Meeting of MCG is expected to be held on 11 October
2007 for the purpose of considering and, if thought fit, passing the following
resolutions:
* the approval of the Acquisition;
* the approval of an increase of the authorised share capital of the
Company; and
* the authorisation of the Directors, pursuant to section 80 of the Act,
to allot relevant securities in connection with the Acquisition.
Details of the Extraordinary General Meeting will be set out in the Circular.
Further details in relation to the Acquisition (and other proposals) will be set
out in the Circular which is expected to be sent to Shareholders on or shortly
after 21 September 2007, together with a notice convening the Extraordinary
General Meeting.
Enquiries
Management Consulting Group PLC
Kevin Parry Chief Executive 020 7710 5000
Chris Povey Head of M&A
Craig Smith Finance Director
Rothschild (financial adviser and sponsor)
Sian Westerman 020 7280 5000
Dominic Epton
Maitland
Suzanne Bartch 020 7379 5151
Peter Ogden
N M Rothschild & Sons Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting as financial adviser and
sponsor to MCG and no-one else in connection with the matters referred to herein
and will not be responsible to anyone other than MCG for providing the
protections afforded to clients of N M Rothschild & Sons Limited or for giving
advice in relation to such matters.
The contents of this announcement which have been prepared by and are the sole
responsibility of MCG have been approved by N M Rothschild & Sons Limited solely
for the purposes of section 21(2)(b) of the Financial Services and Markets Act
2000.
This announcement includes statements that are, or may be deemed to be,
''forward-looking statements''. These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
''believes'', ''estimates'', ''plans'', ''anticipates'', ''targets'', ''aims'',
''continues'', ''expects'', ''intends'', ''may'', ''will'', ''would'' or
''should'', or in each case, their negative or other variations or comparable
terminology. These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this announcement
and include statements regarding the Company's, or the Group's intentions,
beliefs or current expectations concerning, among other things, the Company's,
or the Group's results of operations, financial condition, liquidity, prospects,
growth, strategies and the industries in which the Company or the Group
operates. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances. A number of
factors could cause actual results and developments to differ materially from
those expressed or implied by the forward-looking statements including, without
limitation: conditions in the markets, market position of the Company or the
Group, earnings, financial position, cash flows, return on capital and operating
margins, anticipated investments and capital expenditures, changing business or
other market conditions and general economic conditions. These and other factors
could adversely affect the outcome and financial effects of the plans and events
described in this announcement. Forward-looking statements contained in this
announcement based on past trends or activities should not be taken as a
representation that such trends or activities will continue in the future.
Subject to any requirement of the UK Listing Authority or London Stock Exchange
or as a matter of law, neither MCG nor Rothschild undertakes any obligation to
update or revise any forward looking statements, whether as a result of new
information, future events or otherwise. Undue reliance should not be placed on
forward-looking statements, which speak only as of the date of this
announcement.
The New Ordinary Shares have not been and will not be registered under the
United States Securities Act of 1933, as amended, (the "Securities Act") or
under the securities laws of any state of the United States and may not be
offered as sold, except pursuant to an exemption form, or in a transaction not
subject to, the registration requirements of the Securities Act and applicable
state securities laws. This announcement shall not constitute an offer to sell
or the solicitation of an offer to buy the New Ordinary Shares, nor shall there
be any sale of the New Ordinary Shares in any state or other jurisdiction in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or jurisdiction.
The New Ordinary Shares may not be resold unless they are registered under the
Securities Act and applicable state securities laws or an exemption from
registration is available.
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise:
"Act" or "Companies Act" the Companies Act 1985 (as amended)
"Acquisition" the proposed acquisition by way of
merger of the entire issued share
capital of KSA
"Agreement and Plan of Merger" the conditional agreement and plan of
merger dated 18 September 2007
between KSA Subco Corporation, KSA
Acquisition Corporation, the
Stockholder Representative (each term
as defined therein) and MCG
"Board" or "Directors" the board of directors of the Company
"Company" or "MCG" Management Consulting Group PLC
"Completion" completion of the Acquisition
"Enlarged Group" the Group as enlarged by the
Acquisition
"Enlarged Share Capital" the issued ordinary share capital of
the Company, as enlarged by the
allotment and issue of the New
Ordinary Shares
"Existing Ordinary Shares" the 275,256,858 Ordinary Shares in
issue as at the date of this
announcement
"Extraordinary General Meeting" or "EGM" the extraordinary general meeting of
the Company expected to be held on 11
October 2007
"FSMA" the Financial Services and Markets
Act 2000, as amended
"FSA" Financial Services Authority
"IFRS" International Financial Reporting
Standards
"Group" or "MCG Group" the Company and its subsidiary
undertakings
"Ineum" Ineum Conseils et Associes S.A.
"KSA" KSA Associates, Inc.
"KSA Group" KSA and its subsidiary undertakings
"KSA Options" subsisting options under the Kurt
Salmon Associates, Inc.2002 Stock
Option and Incentive Plan
"KSA Optionholders" those individuals who hold KSA
Options
"KSA Shares'' all of the outstanding share capital
and voting rights of KSA
"KSA Vendors" the holders of the shares in KSA
immediately prior to Completion
"Listing Rules" the listing rules issued by the UK
Listing Authority under section 73A
of FSMA
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" the up to 53,643,103 new Ordinary
Shares to be issued pursuant to the
Acquisition
"Official List" the Official List of the UK Listing
Authority pursuant to Part VI of the
FSMA
"Ordinary Shares" ordinary shares of 25 pence each in
the capital of the Company
"Rothschild" N M Rothschild & Sons Limited
"Share Consideration Agreement" the adjustment, pursuant to the terms
of the Agreement and Plan of Merger,
of up to ten per cent. up or down of
the number of New Ordinary Shares to
be issued to reflect whether the mid-
market price of an Ordinary Share on
the trading day(converted at the
average US Dollar/Sterling exchange
rate on such trading day into US
Dollars) immediately prior to
Completion is greater or less than
48.84 pence, being the average of the
closing mid-market price of an
Ordinary Share for the 30 trading
days immediately prior to 18
September 2007 (being the date on
which the Agreement and Plan of
Merger was executed), converted at
the average US Dollar/ Sterling
exchange rate for such period into
US Dollars
"Share Escrow Agreement" the share escrow agreement to be
entered into on Completion between
the KSA Vendors, MCG and JPMorgan
Chase Bank, National Association
"Share Option Scheme" the Company's existing share option
schemes
"Shareholders" holders of Ordinary Shares
"Sterling" or "#" the lawful currency for the time
being of the United Kingdom
"Stockholders Agreement" the stockholders agreement to be
entered into prior to or on
Completion between the KSA Vendors,
MCG and KSA Subco Corporation (as
defined therein)
"UK Listing Authority" the FSA, in its capacity as the
competent authority for the purposes
of Part VI of FSMA
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland
"United States" or the "US" United States of America,
its territories and possessions, any
state of the United States and the
District of Columbia
"US$" US Dollars, the lawful currency of
the United States
Save where otherwise provided, the exchange rate used to convert amounts in this
document denominated in US Dollars into amounts denominated in UK pounds
sterling is as follows: US$1.995 to #1.
ENDS
--------------------------
(1) This statement is not intended to constitute a profit forecast and should
not be interpreted to mean that the actual earnings of the Enlarged Group
following the Acquisition will necessarily match or exceed the historic
published earnings.
(2) This statement is not intended to constitute a profit forecast and should
not be interpreted to mean that the actual earnings of the Enlarged Group
following the Acquisition will necessarily match or exceed the historic
published earnings.
(3) This statement is not intended to constitute a profit forecast and should
not be interpreted to mean that the actual earnings of the Enlarged Group
following the Acquisition will necessarily match or exceed the historic
published earnings.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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