MSS Managed Support

 

TIDMMSS 
 
RNS Number : 3949T 
Managed Support Services PLC 
28 September 2010 
 

 
FOR IMMEDIATE RELEASE 
 
                                       28 September 2010 
                          Managed Support Services plc 
                             ("MSS" or the "Group") 
 
          Acquisition of Environmental Control Services Limited ("ECS") 
 
                Placing of new ordinary shares to raise GBP3.1m 
 
Acquisition of ECS 
 
MSS is pleased to announce that it has exchanged contracts to acquire ECS, a 
London based technical Building Services provider for a net consideration of 
GBP3.2m, adjusted for surplus cash. 
 
The consideration will be satisfied as to GBP2.975m in cash and 312,500 new 
ordinary MSS shares as at completion, and a further GBP0.2m in cash payable in 
September 2011.  The total consideration receivable by the vendors will be 
GBP5.35m to reflect GBP2.15m of surplus cash balances currently held within ECS 
as at completion and working capital balances. 
 
In addition, it is agreed that ECS is to be acquired with a further, agreed net 
cash balance of GBP0.5m at completion to be available for the enlarged Group's 
general working capital purposes.  This amount is not reflected in the 
consideration.  ECS has no indebtedness. 
 
ECS is a long established provider of specialist mechanical and engineering 
services for corporate and commercial buildings, primarily within the M25 
region.  The business was founded by the two vendors of whom one will be leaving 
as at completion and the other taking a senior Group engineering role within the 
enlarged MSS.  The current Managing Director of ECS is also taking a senior role 
in the enlarged Group. 
 
ECS reported turnover of GBP8.8m for the year ended May 2010 with an adjusted 
operating profit of approximately GBP0.4m, before non continuing vendor costs. 
The reported operating profit was GBP0.2m.  In the year to May 2009, ECS 
reported audited turnover of GBP9.0m and an adjusted operating profit, before 
vendor costs, of approximately GBP0.9m.  The reduction in profitability 
encountered during the year ended May 2010 arose primarily due to one 
substantial installation contract which has now been completed.  ECS will no 
longer be competing for similar work. 
 
Reported net assets of ECS at 30 May 2010 were GBP3.0m. 
 
ECS has a large and diverse customer base currently generating contracted 
maintenance revenues of approximately GBP3.2m as at completion.  This contracted 
revenue base has grown materially in recent years.  The MSS Board believes this 
growth reflects the high levels of customer service and engineering skills 
delivered by ECS.  MSS has a particularly high regard for the quality of the 
engineering workforce at ECS and will continue to deploy the same teams in order 
to preserve continuity and service levels for customers. 
 
Reasons for the acquisition 
 
ECS is a successful and profitable operator in the same markets as MSS, as such 
the acquisition will bring improved scale to the Group.  In addition, through 
the acquisition of ECS, MSS will enjoy additional market share as well as 
commercial and operational synergies. 
 
The Board of MSS believes that increased scale and working capital will allow 
the Group to tender successfully for larger maintenance and services contracts. 
 
The transaction is expected to be materially earnings enhancing. 
 
Share Placing 
 
To finance the acquisition, MSS has raised GBP3.1m gross from a placing and 
vendor placing (together "the Placing") of an aggregate of 44,285,715 new 
Ordinary Shares at a Placing Price of 7p per share.  The Placing was undertaken 
by Cenkos Securities plc and Merchant Securities. 
 
Application has been made for a total of 44,598,215 new ordinary shares, 
including 312,500 of consideration shares, to be admitted to trading on AIM. 
Admission and dealing is expected to occur at 8.00 a.m. on 29 September 2010. 
 
Following the admission of the 44,598,215 Ordinary Shares on 29 September 2010 
the Company's total issued share capital will be 209,802,191 Ordinary Shares of 
1p each.  This figure (209,802,191 Ordinary Shares) may be used by shareholders 
as the denominator for the calculations by which they will determine whether 
they are required to notify their interest in, or a change to their interest in, 
the Company under the Disclosure and Transparency Rules. 
 
Prospects 
 
The acquisition of ECS materially increases the scale of the Group's Building 
Services operations as well as enhancing the Group's revenue mix as a result of 
further growth in the Group's contracted revenue base. 
 
The Board believes that the increased financial resources and operating scale 
will enable the Group to compete effectively for strategic outsourcing contracts 
within the Building Services markets and continues to anticipate growth in the 
contracted revenue base. 
 
 
FOR FURTHER INFORMATION, PLEASE CONTACT: 
 
+--------------------------------+----------------------------------+ 
| Managed Support Services plc:  |                                  | 
+--------------------------------+----------------------------------+ 
| Simon Beart, Chief             | 07710 444370                     | 
| Executive                      | 01483 735703                     | 
| Piers Wilson, Finance          |                                  | 
| Director                       |                                  | 
+--------------------------------+----------------------------------+ 
| Cenkos Securities plc, Nomad & |                                  | 
| Joint Broker:                  |                                  | 
+--------------------------------+----------------------------------+ 
|          Nick Wells            | 020 7397 8900                    | 
+--------------------------------+----------------------------------+ 
|          Stephen Keys          |                                  | 
+--------------------------------+----------------------------------+ 
| Merchant Securities Limited,   |                                  | 
| Joint Broker:                  |                                  | 
+--------------------------------+----------------------------------+ 
|          Graeme Cull           | 020 7628 2200                    | 
+--------------------------------+----------------------------------+ 
|          Simon Clements        |                                  | 
+--------------------------------+----------------------------------+ 
| Buchanan Communications:       |                                  | 
+--------------------------------+----------------------------------+ 
|          Richard Darby         | 020 7466 5000                    | 
+--------------------------------+----------------------------------+ 
|                                |                                  | 
+--------------------------------+----------------------------------+ 
 
 
 
Notes to editors 
 
Managed Support Services plc is one of the UK's leading suppliers of compliance 
and technical building services.  MSS provides compliance services, building 
maintenance, and ongoing servicing of commercial properties.  MSS operates in a 
range of diverse markets covering commercial property, hotels and retail 
buildings.  Further information is obtainable from www.mssplc.com. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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