TIDMUBI
RNS Number : 5255U
Ubisense Group PLC
03 December 2013
3 December, 2013
Acquisition of Geoplan Interworks K.K.
Cambridge, UK - Ubisense Group plc ("Ubisense" or the "Company")
(AIM:UBI), a market leader in real time location intelligence
("RTLI") solutions, is pleased to announce that it has entered into
an agreement to acquire the entire issued share capital of Geoplan
Interworks K.K. ("Interworks") (the "Acquisition"), a provider of
location and infrastructure management solutions for utility,
telecoms and manufacturing applications in Asia, for a maximum
total consideration of Yen564.7m (GBP3.4m) (the "Maximum
Consideration").
Acquisition Highlights
The Board of Directors of Ubisense (the "Directors") believe
that the Acquisition will:
-- Provide Ubisense with enhanced geographic reach into the Asian market
-- Present opportunities to develop RTLI services business by
deploying products and services to utility, telecoms and
manufacturing companies in Asia
-- Provide local exposure and proximity to Japanese and Korean manufacturers
-- Afford cross-selling opportunities into an expanded customer base in Asia
-- Enhance Ubisense's product and services offering,
particularly in relation to mobile applications
-- Strengthen and develop Ubisense's existing commercial
relationships with customers such as Daifuku and the recently
announced Asian headquartered automotive logistics group
-- Accelerate Ubisense's current business activities and new customer wins
-- Be break-even at the profit before tax level in the year
ended 31 December 2014 and earnings enhancing in the year ended 31
December 2015
Commenting on the Acquisition, Richard Green, Chief Executive
Officer of Ubisense, said:
"The acquisition of Interworks represents a significant step
forward for the Company. We have long recognised Asia, and Japan
and Korea in particular, as a huge market for our products and the
acquisition will allow us to develop the market significantly from
the initial base we have established with leading companies such as
Mitsubishi, Hyundai, Honda and BMW Cherry."
Overview of Interworks
Headquartered in Tokyo, Japan, Interworks provides location and
infrastructure management solutions, delivering products and
services to customers in the telecoms, water supply, gas,
electricity and manufacturing sectors. Its Japanese operations were
established in 1997 and in recent years it has expanded into Korea
and the Philippines.
Interworks' Chief Executive Officer, Tsunehiko Nishizawa, will
remain within the enlarged group as CEO of the Asian
operations.
Rationale for the Acquisition
The Directors believe that there is strong strategic rationale
for the Acquisition as it provides the Company with a direct
presence in Asia, one of its key growing markets. This is
particularly important given forthcoming changes to Japanese radio
regulations which will allow the sale of Ubisense products in the
Japanese market from 2014. Ubisense and Interworks have already
worked together, with Interworks completing the Hyundai
installation in Korea. The Acquisition will enable Ubisense to
develop and strengthen its existing strategic relationships with
original equipment manufacturers ("OEMs") such as Daifuku, and the
recently announced Asian headquartered automotive logistics group
as well as target new customers, in particular Japanese and Korean
manufacturing companies.
Furthermore, the Acquisition affords opportunities to cross-sell
Ubisense's existing products and services, as well as to provide
implementation and support to the enlarged group's customer base
such as BMW Cherry, Hyundai and KEPCO. The addition of Interworks'
customer relationships is expected to create new areas of growth
for the enlarged group as well as enhance existing client
relationships. There is also the additional opportunity to augment
Ubisense's product offering within its existing client
relationships through the availability of specific Interworks
product applications.
The Acquisition provides diversification benefits to Ubisense by
improving the Company's revenue mix in terms of exposure to
sectors, geographic distribution and software applications. The
Acquisition provides Ubisense with a strong presence in Asia and a
complementary product offering, from which the enlarged group can
accelerate its current business activities in this region.
The Acquisition is expected to be break-even at the profit
before tax level in the year ended 31 December 2014 and be earnings
enhancing for the year ended 31 December 2015.
Terms of the Acquisition
Under the terms of the Acquisition, Ubisense will purchase the
entire issued share capital of Interworks from the selling
shareholders ("the Vendors") for a Maximum Consideration of
Yen564.7m (c. GBP3.4m). This is made up of an initial consideration
of Yen416.0m (c. GBP2.5m) (the "Initial Consideration") and a
deferred consideration of up to a maximum of Yen148.7m (c. GBP0.9m)
(the "Deferred Consideration").
The Initial Consideration consists of Yen130.7m (c. GBP0.8m) in
cash at Completion (the "Cash Consideration") funded through
Ubisense's existing debt facility, and Yen285.3m (c. GBP1.7m) to be
satisfied through the issue of 759,809 new ordinary shares of
nominal value of GBP0.02 in Ubisense (the "New Ordinary Shares") at
a price of 225.25 pence per ordinary share, being the average of
the volume weighted mid-market closing price on each of the
preceding five business days, and equating to approximately 3.3% of
the enlarged issued Ubisense share capital (the "Share
Consideration").
The Deferred Consideration consists of a maximum of Yen61.6m (c.
GBP0.4m) in cash that will become payable to the Vendors if certain
profit based targets are met in the year to 30 June 2014 and a
further maximum of Yen87.1m (c. GBP0.5m) cash will become payable
if certain revenue and profit based targets are met in the calendar
years 2014, 2015 and 2016.
Interworks comprises wholly owned subsidiaries in Korea and the
Philippines, and a 77% owned subsidiary in Japan (the largest
entity in the group). Interworks has an option to acquire an
additional 18% in the Japanese subsidiary until May 2015 for
Yen113.0m (c. GBP0.7m).
The Vendors are comprised of Tsunehiko Nishizawa, the Employee
Share Plan, certain directors of Interworks and certain other
selling shareholders.
Application has been made for the admission of 759,809 New
Ordinary Shares to trading on AIM. It is expected that dealings in
these New Ordinary Shares, which will rank pari passu in all
respects with the existing ordinary shares of the Company, will
commence on 6 December 2013. Following the issue of the New
Ordinary Shares, the issued share capital of the Company will
comprise 23,068,105 ordinary shares.
Lock-up Restrictions
Tsunehiko Nishizawa is subject to certain lock-up restrictions
in relation to the New Ordinary Shares in Ubisense that he has
received as part of the Share Consideration.
Financial Information
For the financial year ended 30 June 2013, Interworks generated
consolidated revenues of c. Yen900m (c. GBP5.4m) and a consolidated
loss before tax of c. Yen64m (c. GBP380,000). As at 30 June 2013,
Interworks had consolidated net assets of c. Yen380m (c. GBP2.3m)
and consolidated net cash of c. Yen400m (c. GBP2.4m).
Debt Facility
Under the current banking facility (the "Debt Facility") with
HSBC Bank plc the Company has GBP2m available for draw down to fund
the Cash Consideration of the Acquisition. The Debt Facility allows
the Group to draw down up to a maximum of GBP5m at an agreed rate
of 3% above LIBOR and is due to expire in 2016.
-Ends-
About Ubisense
Ubisense is a market leader in real time location intelligence
solutionswhich enable companies to optimise their business
processes. By keeping track of key assets, Ubisense solutions bring
clarity to complex operations whilst also improving quality and
reliability. Ubisense Real-Time Intelligence Solutions are used by
a number of blue chip customers across the world, such as AGCO,
Airbus, Aston Martin, BMW, Cablevision, Daimler, Deutsche Telekom,
Duke Energy, John Deere, MINI and VW.
Ubisense is headquartered in Cambridge, UK, with offices in the
USA, Canada, Germany, France and Singapore. For more information
visit: www.ubisense.net.
About Interworks
Founded in 1997 and headquartered in Tokyo, Interworks is a
total solution provider, delivering products and services to global
and domestic customers including utility, telecom and manufacturing
companies. For more information visit: www.geoplan.co.jp.
Contact Tel: +44 (0) 1223
535170
Ubisense Group
Richard Green
Gordon Campbell
Canaccord Genuity Limited (NOMAD) Tel: +44 (0) 207
523 8000
Simon Bridges
Lucy Tilley
Brendan Gulston
FTI Consulting Tel: +44 (0) 20
7831 3113
Jon Snowball
Tracey Bowditch
This information is provided by RNS
The company news service from the London Stock Exchange
END
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