TIDMWSG
RNS Number : 6980G
Westminster Group PLC
08 November 2018
Westminster Group Plc
('Westminster', the 'Group' or the 'Company')
Acquisition of Keyguard UK Ltd.
Westminster Group Plc (AIM: WSG), a leading supplier of managed
services and technology-based security solutions worldwide is
pleased to announce the acquisition of security and risk management
company Keyguard UK Ltd ("Keyguard"). Highlights of the acquisition
include:
-- Acquisition gives Westminster greater strength in offering
combined technology and guarding solutions to its target markets of
critical infrastructure security
-- Immediate cost savings identified post integration
-- Acquisition expected to be earnings enhancing in first year of ownership
-- Additional recurring revenue stream to the Group
-- Cross-selling opportunities into both Westminster and Keyguard's client bases
-- Retention of key staff
-- Expected maximum cost of GBP200k, subject to working capital requirements of the business
Introduction to Keyguard:
Keyguard is a UK based security and risk management company
providing security services to organisations and critical national
infrastructure across the country. It is focused on infrastructure
growth - Construction, Renewable Energy and Transport sectors.
Services include manned guarding, mobile patrols, risk management
and K9 services.
The business was established in 2006 based in Corby,
Northamptonshire by founder, Rob Lawrence, who built a successful
and well-respected business. Keyguard holds the required industry
accreditations and is an ISO quality assured business.
In the year ending 31 December 2016 the business had a turnover
of GBP1,477,495 generating profit before tax of GBP199,868. In June
2017 Rob Lawrence sold 60% of the shareholding to Armatus Risk
Holdings Limited ("Armatus"). In September 2018 Keyguard's parent
company Armatus was placed into administration.
Due to Keyguard's parent company, Armatus, being in
Administration the 2017 accounts have not yet been finalised and
when completed are not expected to provide a true reflection of
Keyguard's operations as they will be distorted by Armatus costs
and activities. However, we understand that turnover in 2017 was in
the region of GBP1.4m, similar to 2016.
More information on Keyguard may be found on their website
www.keyguarduklimited.co.uk
The Transaction:
On 7 November 2018 Westminster completed the purchase of the 60%
shareholding in Keyguard from the administrators of Armatus and the
remaining 40% from Rob Lawrence. The business will be relocated to
the Westminster offices in Banbury and consequently Keyguard
overhead cost savings will be achieved. Rob Lawrence will remain as
a director in the business and has agreed to a standard Westminster
Group employment contract.
The total consideration payable is expected to be a maximum of
GBP200,000. Expected net asset value of GBP18,224 was paid in cash
on completion and the balance estimated to be a maximum of
GBP181,776 will be payable in cash as an earn out based on certain
debt collection over the next 24 months. Westminster will also
provide working capital for expansion and to fund new
contracts.
The assets acquired include stock, debtors and bank balances
offset by creditors. There are also several vehicles used in
guarding and office equipment.
The completion and transaction costs have been funded from the
Company's existing resources.
Rationale for Acquisition:
Keyguard operates in a strong and growing market and is
completely allied to and enhances Westminster's existing market,
opening new opportunities and broadening the scope of the Group's
business portfolio. The acquisition is expected to be immediately
earnings enhancing and is synergistic in that not only will this
transaction allow the Group and Keyguard to be able to sell into
each other's customer base but will enable a broader range of joint
offerings where technology and manned guarding are both required,
particularly within the aviation and critical infrastructure
market.
As part of the Group, Keyguard's existing operations can be
enhanced and new opportunities pursued, and the Board believes a
performance in line with 2016 can be achieved or exceeded
delivering a new recurring revenue stream to the Group.
Commenting on the acquisition of Keyguard Peter Fowler, Chief
Executive of Westminster Group, said:
"I am delighted to be able to announce the acquisition of
Keyguard, it is a good business and brings added capabilities to
our Group. Indeed, we are already exploring new and interesting
joint opportunities.
"I am equally delighted that Rob Lawrence will remain with the
business. Rob has been known to us for some years and he is a
hardworking, knowledgeable and dedicated individual with an ex UK
Forces background. Rob will be a valued part of our management team
and will help drive the business forward."
Commenting on joining Westminster, Rob Lawrence, founder of
Keyguard said:
"I am very happy and extremely pleased to now be part of the
Westminster Group. I am proud of what we have achieved to date with
Keyguard and I am excited about what we can now achieve in the
future given the reputation, experience and professional support of
Westminster."
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
For further information please contact:
Westminster Group Plc Media enquiries via Walbrook
PR
Rt. Hon. Sir Tony Baldry - Chairman
Peter Fowler - Chief Executive Officer
Mark Hughes - Chief Financial Officer
S. P. Angel Corporate Finance LLP (NOMAD
& Broker)
Stuart Gledhill 020 3470 0470
Caroline Rowe
Walbrook (Investor Relations)
Tom Cooper 020 7933 8780
Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com
Notes:
Westminster Group plc is a specialist security and services
group operating worldwide via an extensive international network of
agents and offices in over 50 countries.
Westminster's principal activity is the design, supply and
ongoing support of advanced technology security solutions,
encompassing a wide range of surveillance, detection, tracking and
interception technologies and the provision of long-term managed
services contracts such as the management and running of complete
security services and solutions in airports, ports and other such
facilities together with the provision of manpower, consultancy and
training services. The majority of its customer base, by value,
comprises governments and government agencies, non-governmental
organisations (NGO's) and blue-chip commercial organisations.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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