Marlowe : Acquisition of WCS Environmental Group Limited

18 April 2016

Marlowe plc

Acquisition of WCS Environmental Group Limited

Marlowe plc ('Marlowe'), the support services group focused on acquiring and developing companies that provide critical asset maintenance services, announces the acquisition of WCS Environmental Group Limited ('WCS') for a total enterprise value of £2.5 million.

WCS is a provider of integrated water treatment, hygiene, testing and engineering services headquartered in Gloucestershire with around 90 employees. The company was founded in 1987 and has a long-standing base of customers across the UK in both the private and public sectors, including leisure, retail, defence and engineering, local authorities and NHS trusts.

Following the recent acquisition of Swift, a provider of fire protection and security systems services, the acquisition of WCS represents Marlowe's first step into the water treatment market. The Board believes that the water treatment market shares attractive key characteristics with the fire protection and security systems markets, including a significant element of non-discretionary spend, strong regulatory and legislative drivers, a degree of operational and technical complexity which favours outsourcing and the same channel to market.

In the 12 months to 31 December 2015, WCS recorded revenues of £5.8 million, adjusted EBITDA after non-recurring costs of £0.6 million and profit before taxation of £0.2 million. At 31 December 2015 the value of WCS' Group net assets was £0.3 million.

The total enterprise value includes a cash consideration of £1.56m and the repayment of shareholder loans of £0.47m to be financed from Marlowe's existing cash and debt facilities. In addition, the Company will issue 287,878 New Ordinary Shares at a price of £1.65p per share to certain vendors who are also members of WCS's senior management team and who are staying with the business. The shares issued as consideration are subject to a lock up period of between 24 and 36 months with orderly market conditions attached after this period. Application has been made for the new ordinary shares issued as consideration to be admitted to trading on AIM at 8:00am on 21 April 2016. Following admission, the Company will have 21,372,877 shares in issue.

Alex Dacre, Chief Executive of Marlowe plc, commented:

'The acquisition of WCS marks the next stage in the development of Marlowe as we implement our strategy of building a leading UK support services group in complementary areas of critical asset maintenance. With the acquisitions of Swift and WCS, we have now established a presence in our initial target markets of fire protection, security systems and water treatment, which provide significant scope for consolidation. We have a good pipeline of opportunities to add scale to Marlowe and we look forward to working with WCS in accelerating our growth.'

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About Marlowe plc

Marlowe is an AIM-listed company formed to create sustainable shareholder value through the acquisition and development of businesses that provide critical asset maintenance services in the UK. It is focused on fire protection, security systems and water treatment services - which are essential to its customers' operations and invariably governed by regulation, and where customers require a single specialist outsourced provider with nationwide coverage. Our customers can be found on most high streets, in office complexes and industrial estates, and include SMEs, local authorities, facilities management providers, multi-site NHS trusts and FTSE 100 companies.

Marlowe plc issued this content on 18 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 18 April 2016 07:27:11 UTC

Original Document: http://www.marloweplc.com/news/rns/id/80