TIDMDGB
RNS Number : 7588U
Digital Barriers plc
21 October 2010
21 October 2010
Digital Barriers plc
("Digital Barriers" or the "Company")
Acquisition of Waterfall Solutions Limited
Digital Barriers plc (AIM: DGB), the specialist provider of
products and services to the homeland security market, is pleased
to announce the acquisition of Waterfall Solutions Limited
("Waterfall") for a maximum consideration of GBP5.5 million in cash
and loan notes (the "Acquisition").
Waterfall is a UK-based provider of advanced technology
solutions and related consulting services, specialising in the
areas of image processing, data fusion, modelling and simulation,
and fits neatly with Digital Barriers' business strategy and
existing acquired assets. Deploying sector-leading intellectual
property and best-in-class specialist services and technology,
Waterfall works directly with government and commercial clients in
the defence and security sectors as well as through strategic
partnerships with prime system integrators.
Rationale for the Acquisition
The Board of Digital Barriers (the "Board") believes that
Waterfall represents a clear and strategic opportunity for Digital
Barriers to make further progress in developing a leading
mid-market homeland security business, as well as building upon
Waterfall's strong presence in the defence market.
At present, the most significant threat to security comes not
from state-to-state conflict, but from international and domestic
terrorism. Digital Barriers works with its clients to advise on,
and then to design and deploy, advanced solutions that enhance the
physical and electronic security and resilience of high profile,
high value potential targets such as ports, airports and public
transport; secure government facilities; border crossings; critical
national infrastructure and computer systems and networks.
The Board believes that the acquisition of Waterfall will enable
Digital Barriers to develop in a number of key strategic areas.
First, by combining Waterfall's best-in-class technology and
services with existing Digital Barriers capabilities, the Company
will be able to develop a wider range of compelling solutions for
the international Homeland Security market. Second, in combination
with Digital Barriers' current technology portfolio, Waterfall's
technology will enable the Company to make further progress in
developing key end-customer and partner relationships in both the
UK and in international markets, such as Asia Pacific and the
Middle East.
The Founder, Managing Director and majority shareholder of
Waterfall, will remain with the business as Managing Director, and
the current management team will also remain in place.
Terms of the Acquisition
The initial consideration of GBP3.9 million is payable in cash
on completion and will be satisfied from Digital Barriers' existing
cash reserves.
Deferred consideration of up to GBP0.85 million is payable in
cash and loan notes on the completion of Waterfall's current
financial year, ending on 30 September 2011, subject to the
satisfaction of certain performance conditions and the continued
employment of key management. An additional GBP0.75 million of
deferred consideration is payable in cash and loan notes on
completion of the subsequent financial year, ending on 30 September
2012, subject to the satisfaction of certain performance
conditions.
Financial Information
Waterfall's latest audited accounts for the financial year ended
30 September 2010 reported turnover of GBP2.10 million, with EBIT
of GBP0.48 million (EBIT is stated after contributions to an
executive pension scheme that are to be discontinued following the
Acquisition). At 30 September 2010, Waterfall had net assets of
GBP0.74 million.
Tom Black, Executive Chairman of Digital Barriers commented:
"I am delighted to announce our acquisition of Waterfall and
very pleased to be bringing such high calibre people and technology
into the Digital Barriers fold. Waterfall's innovative and highly
effective solutions are very well positioned in both the defence
and security sectors. We believe that, as a part of Digital
Barriers, there exists a real and compelling opportunity to apply
Waterfall's capabilities more broadly, particularly in the growing
and specialised Homeland Security sector in the UK and
overseas."
Moira Smith, Founder, Managing Director and majority shareholder
of Waterfall Solutions Limited commented:
"I strongly believe that this is a tremendous and exciting
opportunity for Waterfall, its staff, and customers as we move to
the next phase of our development. Over eleven years we have
brought a fresh new business approach to the defence and security
markets where we have consistently delivered cost-effective and
innovative technology. I am delighted that we will now be able to
build on that solid basis and offer even greater capabilities and
infrastructure to our existing customers, whilst maintaining these
core business values.
"Digital Barriers is an excellent "fit" for Waterfall in terms
of technology, market sectors, business approach and shared vision,
and will extend our reach to clients across the globe. I therefore
very much look forward to our future as part of Digital Barriers
and share Tom and his team's enthusiasm for what we can now achieve
together for the benefit of our customers."
For further information please contact:
Digital Barriers plc +44 (0)20 7940
4740
Tom Black, Executive Chairman
Colin Evans, Managing Director
Investec Investment Banking +44 (0)20 7597
5970
Andrew Pinder
Financial Dynamics +44 (0)20 7831
3113
Edward Bridges / Matt Dixon
About Digital Barriers:
Founded by the leadership team behind Detica Group, Digital
Barriers is focused on the provision of specialist products and
services to the homeland security market where the threat of
international and domestic terrorism represents a compelling
commercial opportunity. Over time, the Company aims to become a
mid-market specialist, working directly with end-customers and
internationally through key partner organisations, to provide
focused, proportionate and effective solutions for the protection
of high-profile targets, crowded spaces and the critical national
infrastructure.
www.digitalbarriers.com
Disclaimer:
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",
"projects", "anticipates", "expects", "intends", "may", "will", or
"should" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the Company's current intentions, beliefs or expectations
concerning, among other things, the Company's results of
operations, financial condition, liquidity, prospects, growth
strategies and the Company's markets. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Actual results and
developments could differ materially from those expressed or
implied by the forward-looking statements. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements in this announcement are based on
certain factors and assumptions, including the Company's current
view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of
operations, growth strategy and liquidity. Whilst the Company
considers these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as
required by law or by the AIM Rules for Companies, the Company
undertakes no obligation to publicly release the results of any
revisions to any forward-looking statements in this announcement
that may occur due to any change in the Company's expectations or
to reflect events or circumstances after the date of this
announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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