Acquisition (6073M)

TIDMNGH

RNS Number : 6073M

Network Group Holdings PLC

18 August 2011

Network Group Holdings plc

("NGH" or the "Company" or the "Group")

Acquisition of SSR Contract & Technical Limited and SSR General & Management Limited

The Company is pleased to announce that it has recently completed two acquisitions bringing the number of complementary acquisitions completed by the Company during the current financial year to six.

On 10 August 2011 the Group acquired, through a purchase of shares from SSR Personnel Incorporating Executive Profiles Limited and a subscription for new shares, 51% of the issued share capital of SSR Contract & Technical Limited ("SSRCT") and 51% of the issued share capital of SSR General & Management Limited ("SSRGM"), recruitment businesses specialising in the placement of permanent and contract individuals in the security and allied markets. The consideration for the purchase of shares is based on the profitability of the acquired companies during the financial years ending 31 December 2011 and 31 December 2012 up to a maximum of approximately GBP422,000 for each acquisition. Initial consideration of approximately GBP82,000 has been paid in cash for each company. As part of the transaction the Group made an injection of working capital of approximately GBP78,000 into each company in the form of a subscription for new shares.

Unaudited financial statements of SSRCT for the seven month period ended 31 December 2010 show turnover of GBP1.9m and gross profit of GBP0.4m.

Unaudited financial statements of SSRGM for the seven month period ended 31 December 2010 show turnover of GBP0.5m and gross profit of GBP0.3m.

The management of the two London based businesses have retained a 49% shareholding in each business and have entered into conversion agreements which allow their shares to be converted into equity in NGH in the future in keeping with the partnering principles which underpin the strategy of NGH.

The acquisitions have been funded from internal resources.

Commenting on the acquisitions, Tim Watts, Chief Executive Officer of NGH, said

"Further to my comments that I made in the announcement on 05 May 2011 this is yet another targeted acquisition of two well established businesses, operating in a market that complements the existing NGH operations and has a presence in a sector that NGH has identified as offering exciting opportunities. I am delighted to welcome the management and employees of SSRCT and SSRGM to NGH and using our platform we will be focussed on supporting the businesses to grow."

For further information please contact:

 
 Network Group Holdings plc 
  Paul Davis 
  www.networkgroupholdings.co.uk    01676 525 000 
 Nominated Adviser 
  Arden Partners plc 
  Steve Douglas                     0121 423 8943

This information is provided by RNS

The company news service from the London Stock Exchange

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