Hill & Smith Holdings PLC ("Hill & Smith") is pleased to announce that, on Friday 23 August, it completed the acquisition of the share capital of Mallatite, together with its wholly owned subsidiaries, Mallatite (Scotland) Limited and Mallatite (Powder Coatings) Limited, for a consideration of approximately £3.2m.
Mallatite, based in Manchester, with operations in Derbyshire and Glasgow, manufactures and supplies street lighting columns, steel posts for road traffic signs and telecommunications equipment and distributes powder coatings for the corrosion protection of metal. Based on the audited accounts to 31 August 2001, Mallatite has net assets of £1.0m and generated an operating profit of £0.2m for a turnover of £8.9m.
The purchase consideration is being satisfied by £1.9m in cash, loan notes of £0.9m and the issue of ordinary shares in Hill & Smith to the value of £0.4m. In addition, bank debt of Mallatite of £1.8m is being assumed by Hill & Smith.
Application has been made for 504,859 new ordinary shares, which will rank pari passu (save as set out below) with the Company's existing issued ordinary shares, to be admitted to the Official List of the UK Listing Authority and for such shares to be admitted to trading on the London Stock Exchange's market for listed securities, which is expected to occur today. These shares will not rank for any dividend declared or paid prior to the final dividend in respect of the financial year ending 31 December 2002.
Commenting on the acquisition, the Chief Executive, David Grove said:
"We are acquiring Mallatite because it is a leading lighting column manufacturer with great innovative strengths and trades in a market estimated at £50m annually. This will expand our product range in the Highways infrastructure market and with the potential replacement of some 4.8m lighting columns, 66% of the current street lighting stock over the next 10 years, this will provide a significant benefit to Hill & Smith. Mallatite will benefit from a number of synergies with Hill & Smith, including economies of scale, which will have a positive effect on its overall profitability".
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