Acquisition and Placing
Acquisition
· ACE, which was established in 1990, provides office fit out and refurbishment services in Brazil's two largest cities of Sao Paulo and Rio de Janeiro.
· ACE provides services to both local clients (60% of its activities) as well as international clients. ACE employs around 115 staff and, in the year ended 31 December 2012, it reported revenue of £10m and profit before tax of £1.1m.
· The Acquisition is consistent with ISG's stated strategy and will enhance the Group's offering by:
- expanding ISG's international presence into a developing economy with excellent long-term growth prospects;
- providing opportunities to market to ISG's existing international client base; and
- providing opportunities to assist ACE expand into new sectors in which the Group has expertise.
· Under the terms of the Acquisition, ISG will purchase an initial 20% minority interest in ACE for £1.9m (satisfied by £1.7m cash and £0.2m shares in ISG), and will have a circa twelve month option to acquire the remaining 80% of shares in ACE for a maximum consideration of £12.7m, payable over four years.
· The Acquisition is conditional only upon completion of the Placing.
Placing
· Gross proceeds of £7.75m (approximately £7.35m net of expenses) through a placing of new ordinary shares of 1 pence each in the capital of ISG at a price of 155 pence per new ordinary share.
· The Placing Shares will represent approximately 13% of the Enlarged Issued Share Capital.
· The Placing has been fully underwritten by Numis.
· It is expected that admission of the Placing Shares to AIM will become effective, and dealings in the Placing Shares will commence on AIM, on 26 June 2013.
· The proceeds of the Placing will fund the cash element of the ACE consideration due up to March 2015 of circa £4m (assuming exercise of the option), as well as the payments due under a number of bolt-on acquisitions and related costs.