TIDMMIDW
RNS Number : 2490J
Midwich Group PLC
08 September 2016
For Immediate Release 8 September 2016
Midwich Group plc
("Midwich" or "the Group")
Acquisitions of Holdan Limited and Wired Limited
Midwich, a specialist audio visual and document solutions
distributor to the trade market with operations in the UK and
Ireland, France, Germany and Australasia, is pleased to announce
the acquisition of Holdan Limited ("Holdan" or "the Company") in
the UK for a maximum consideration of approximately GBP7.9m (the
"Holdan Acquisition") and the acquisition of Wired Limited
("Wired") in New Zealand.
Holdan is a value-added distributor of technology solutions
focused on the broadcast, professional video and traditional
audio-visual markets. The company is based in Glossop, near
Manchester and currently employs 35 staff. Holdan is a leader
within the UK broadcast market, and has a significant and growing
export business. The Company traded with 515 mostly specialist
broadcast customers in 2015, an 11% increase on the previous year.
In addition to hardware distribution, the Company provides a broad
spectrum of services, including demonstrations, system design,
configuration, and repair facilities to the trade - providing much
needed support to users of broadcast and professional video
equipment. In the year ended 31 December 2015 Holdan reported
annual turnover of GBP20.6m and profit before tax of GBP1.1
million. The Company has continued to perform well in 2016.
Midwich has acquired 75% of the issued share capital of Holdan
from Chris Daniels and Allan Leonhardsen. In line with the
Company's long term succession plan, Chris Daniels has stepped down
as Holdan's managing director, but will continue with the business
on a full time basis before retiring in 2017. Allan Leonhardsen has
become Holdan's managing director with immediate effect. Allan
joined the business in 2003 and has been the sales director for the
past twelve years. Kieron Seth becomes sales and marketing
director, adding sales to his previous marketing
responsibilities.
The Holdan Acquisition has been funded from the existing cash
resources of the Group. The structure of consideration is in line
with the Group's previous approaches, with 75% of Holdan being
acquired at the time of announcement. Midwich has options to
acquire the remaining 25%, over the next three years on a
pre-determined methodology linked primarily to earnings growth.
Consideration for the initial 75% of the Company is split GBP3
million on completion and GBP1.5 million after 12 months.
In addition, the Group has incurred transaction fees and
expenses in connection with the Holdan Acquisition of approximately
GBP0.1m. The Holdan Acquisition is expected to be immediately
earnings enhancing for the Group.
Wired is a small New Zealand based AV distributor with offices
in Wellington and Auckland specialising in HD distribution
solutions for the domestic and commercial market. The acquisition
augments Midwich's existing market position and capability in the
Australian and New Zealand markets. Wired had a revenue of NZ $2
million in the year to 31 March 2016.
As outlined at the time of IPO, the acquisitions of Holdan and
Wired are in line with Midwich's strategy to grow operations
through a combination of organic development and selective infill
acquisitions. Holdan fits Midwich's UK & Ireland acquisition
criteria as it adds to the Group's growing presence in the
broadcast and professional video market sectors. Furthermore, the
Holdan Acquisition advances the Group's penetration in Europe with
c.18% of Holdan's turnover in the year ended 31 December 2015
derived from sales in mainland Europe. Likewise, Wired provides
some additional scale with a complementary offering in New
Zealand.
Stephen Fenby, Managing Director of Midwich commented:
"I am delighted to welcome Allan, Chris, Kieron and the rest of
the Holdan team to the Midwich Group. We have admired the expertise
and reputation of Holdan for some time and look forward to working
together in the future. We recognised some time ago that the
broadcast and professional video markets are a natural adjunct to
our traditional audio visual activity. Having made some headway in
penetrating these markets ourselves, we believe that the expertise
and focus of Holdan will give Midwich the ability to provide a more
comprehensive value-added service to our customers in the UK and
overseas. Similarly, Midwich's vast reach into the audio visual
market provides Holdan's vendors with an opportunity to expand
further into a growing segment.
We are also pleased to welcome Bruce Mackay and the rest of the
Wired team to the Midwich Group. The acquisition in New Zealand
supports two of our key strategic objectives in the region, to
provide outstanding value added support to our customers and
vendors, and to continue the rapid growth of our display solutions
business."
Midwich will be announcing its Interim Results for the six
months ended 30 June 2016 on Tuesday 13(th) September 2016. A
presentation to analysts will take place at 9.30 am at the offices
of FTI Consulting, 200 Aldersgate, EC1A 4HD.
Enquiries:
Midwich Group plc Tel: +44 (0) 1379
Stephen Fenby, Managing Director 649200
Anthony Bailey, Finance Director
Investec Bank plc Tel: +44 (0) 20 7597
James Ireland / James Rudd 4000
Carlton Nelson / Robert Baker
FTI Consulting Tel: +44 (0) 20 3727
Oliver Winters / Alex Beagley 1000
/ Tom Hufton
Notes to Editors:
Midwich is a specialist AV and document solutions distributor to
the trade market, with operations in the UK and Ireland, France,
Germany and Australasia. The Group's long-standing relationships
with over 300 vendors, including blue-chip organisations such as
Samsung, LG, Epson and NEC, supports a comprehensive product
portfolio across major audio visual categories such as large format
displays, projectors, digital signage and printers. The Group
operates as the sole or largest in-country distributor for a number
of its vendors in their respective product sets. The Directors
attribute this position to the Group's technical expertise,
extensive product knowledge and strong customer service offering
built up over a number of years. The Group has a large and diverse
base of approximately 10,000 customers, most of which are
professional AV integrators and IT resellers serving sectors such
as corporate, education, retail, residential and hospitality.
Although the Group does not sell directly to end users, it believes
that the majority of its products are used by commercial and
educational establishments rather than consumers.
Initially a UK only distributor, the Group now has 493 employees
across the UK, Germany, France, Ireland, Australia and New Zealand,
and in the six months to 30 June 2016, 36 per cent of the Group's
revenues were derived from outside the UK. A core component of the
Group's growth strategy is further expansion of its international
operations and footprint into strategically targeted
jurisdictions.
For further information, please visit
www.midwichgroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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