News Release from: Abacus Group
Edited by the Electronicstalk Editorial Team on 22 September 2003
Italian distributor to join the group
Abacus Group is set to acquire a majority stake in ECC Distribution.
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Abacus Group is set to acquire 101,640 shares in ECC Distribution, representing 50.82% of the share capital, at a price of GBP 0.89 million in cash. The acquisition is being made under the terms of a call option granted to Abacus in 1999. Abacus previously acquired 9% of ECC's share capital in August 2003 and, following the acquisition, Abacus' total holding in ECC will be 119,640 shares, representing 59.82% of ECC's share capital.
The 119,640 shares will have been acquired in cash at an aggregate cost of GBP 1.05 million.
In addition, Abacus has a call option to purchase and the other shareholders of ECC will have a put option to sell the remaining 40.18% of shares.
These options are exercisable for cash in four tranches between January 2006 and January 2009.
The consideration for each tranche is based on a multiple of a weighted average of the preceding three years' profits after taxation, subject to a maximum cap.
ECC is the UK holding company of ECC Elettronica, an Italian electronic component distributor, which is based in Milan and covers Italy through a network of seven additional regional offices.
The company has three divisions: ITC which sells IT peripherals; Components which acts as a representative for a number of "blue chip" manufacturers; and Distribution.
ECC markets a broad range of passive, active, electromechanical and display products.
As at 30th September 2002, ECC's consolidated results showed net assets of GBP 2.11 million and profits for the year before and after tax of GBP 0.51 million and GBP 0.17 million, respectively.
Martin Kent, Chief Executive of Abacus Group commented: "We are delighted that ECC is joining the Abacus Group.
Using acquisitions to increase not only the Group's focus, but also the breadth of resource, has always been an important component of our strategy.
This expansion will strengthen our presence in Europe and we look forward to driving the business forward and exploiting the considerable market opportunities now available to us".
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