SID Silverdell

RNS Number:2966O
Silverdell PLC
20 December 2006



                                 SILVERDELL PLC


                    Acquisition of Redhill Analysts Limited


Silverdell Plc (the "Company"), admitted to trading on AIM on 21 April 2006 as
Bow Lane Capital, today announces that it has entered into a conditional
agreement to buy the entire issued share capital of Redhill Analysts Limited 
("Redhill Analysts") a UK asbestos and environmental consultancy for a total
consideration of up to #10m.



This acquisition follows the purchase of the entire issued share capital of
Silverdell (UK) Limited ("Silverdell (UK)"), a leading asbestos remediation
contractor, by the Company in July 2006 following which the Company was re-named
"Silverdell Plc".  The Company was initially established the purpose of
acquiring companies and businesses in the environmental services sector.



The directors of the Company believe the consultancy business of Redhill
Analysts will complement the existing remediation business of Silverdell (UK),
particularly in light of its following strengths: brand and reputation; highly
experienced management team; blue chip customer base and a revenue stream
underpinned by long-term, framework contracts; and prominent representation
within the industry.  Redhill Analysts will continue to operate independently
under the "Redhill Analysts" brand following completion of the acquisition.



David Williams, Chairman of Silverdell Plc, said: "Redhill Analysts is one of
the leading asbestos consultants in the UK, with a strong brand, a blue chip
customer base and a highly experienced and respected management team.  This
acquisition brings a leading consultancy business to complement the existing
Silverdell remediation business, providing us with a dual platform from which to
become the leading UK asbestos services provider.  It also represents the first
step in our stated strategy of consolidating the fragmented asbestos services
industry, which we estimate has experienced an annual growth rate of
approximately 25 per cent since 2002 driven by legislation and the threat of
litigation."



For further enquiries contact:


Silverdell Plc

David Williams, Chairman
Mark Watts, Non-Executive Director
+44 (0) 20 7248 0802


Danny T Spicer, Chief Executive Officer
Sean Nutley, Chief Operating Officer
+44 (0) 20 8591 6677



Cunningham & Co


George C Cunningham
+44 (0) 131 653 3190



Introduction



The Company today announces that it has entered into a conditional agreement to

acquire the entire issued share capital of Redhill Analysts, a UK asbestos and
environmental consultancy, for a total consideration of up to #10 million (the
"Acquisition").



The consideration of #8.5 million due at completion of the Acquisition

("Completion") will be satisfied by a cash payment of #6.5 million and by the
issue of approximately 1.8 million ordinary shares in the capital of the Company
("Ordinary Shares") which have a value of approximately #2 million and are
subject to a one year lock-up.   The Company will finance the cash element of
the consideration due at Completion from existing cash reserves and has also
entered into a debt facility with Barclays Bank plc contemporaneous with the
Acquisition.



In addition, an earn out of up to #1.5 million will be payable through the
payment of cash and issue of additional Ordinary Shares, dependent on the
performance of Redhill Analysts in the financial year ending 31 December 2007.



The vendors of Redhill Analysts are Rob Blackburn, currently the Managing
Director who owns 95% and Brian Giddings, currently the Operations Director, who
owns the remaining 5%.   Both vendors will remain in the business in their
current roles post completion, as will the current Redhill Analysts management
team.



There will be no redundancies in the combined businesses as a result of the
Acquisition neither will there be any changes to the board of directors of the
Company.



No shareholder approvals are required in relation to the Acquisition.



Overview of Redhill Analysts



Redhill Analysts was founded in 1986 to provide asbestos management and
laboratory services to aid clients meet their obligations under the asbestos
regulations.   Now recognised as one of the UK's leading asbestos consultants,
Redhill Analysts works with both public and private sector clients.



Redhill Analysts is accredited by the United Kingdom Accreditation Service
(UKAS) to ISO17020 for the conducting of asbestos surveys, while the company's
laboratory is accredited by UKAS to ISO17025 for the analysis of bulk samples
and for the obtaining and analysis of air samples for both compliance air
monitoring and four stage clearance procedures.   Mr Blackburn has been a member
of influential industry bodies including the Asbestos Liaison Group, the UKAS
Asbestos Technical Advisory Committee and was also a member of the RG8 HSE/UKAS
working group.   Mr Blackburn is also an examiner for the Royal Society for the
Promotion of Health.    Redhill Analysts is an active member of the Asbestos
Removal Contractors Association (ARCA), through their ATaC division, and
represents consulting laboratories on the governing council, currently chairing
the Quality & Technical sub-committee.



The Project Management department provides contract management services
including the specification and procurement of asbestos remediation work.  The
contract management services include on-site monitoring and safety checks
providing a fully documented audit trail of progress from beginning to end.



The company currently has four offices in Surrey, Wales, Midlands and the North,
providing a nationwide service, including emergency call out cover.



Redhill Analysts has a blue chip client base which includes: ASDA, Mace, Mobil,
Motorola, The National Trust, Historic Royal Palaces, Foreign & Commonwealth
Office, Lloyds TSB, HM Prison Service, Laing, several universities, housing
associations, NHS Trusts and local authorities, EDF, BT and Boots.



Redhill Analysts has helped develop, implement and test asbestos modules on many
of the leading FM packages.   Redhill Analysts can also supply the Integrated
Asbestos Manager (IAM), a leading asbestos management tool that provides a
flexible approach to asbestos management and assessment and is designed to
incorporate the requirements of the Control of Asbestos Regulations (CAR 2006).



Redhill Analysts offers a complete asbestos management service.  This includes
advising on when an asbestos survey is required, the effect of identified
asbestos on the client and providing advice on the most efficient and
proportionate method for management.   This allows the client to budget sensibly
for future asbestos works whilst fulfilling their duty to staff and public.



Trading Record of Redhill Analysts


                              2003                   2004                 2005
For the year ended 31      # ' 000                # ' 000              # ' 000
December


Turnover                     3,188                  4,536                5,120


Gross Profit                 1,920                  2,881                3,245


Operating Profit               312                  1,089                1,177





Principal terms of the Acquisition



The consideration of #8.5 million due at Completion will be satisfied by a cash
payment of #6.5 million and by the issue of approximately 1.8 million Ordinary
Shares which have a value of approximately #2 million and are subject to a one
year lock-up.   The Company will finance the cash element of the consideration
due at Completion from existing cash reserves and has also entered into a debt
facility with Barclays Bank PLC contemporaneous with the Acquisition.



In addition, an earn out of up to #1.5 million will be payable through the
payment of cash and issue of additional Ordinary Shares, dependent on the
performance of Redhill Analysts in the financial year ending 31 December 2007.



The maximum amount of the earn out will be payable if the profit after tax of
Redhill Analysts is #1,025,000 in the year ending 31 December 2007 in the event
of 15% year-on-year revenue growth.



No deferred consideration will fall due if the profit after tax in the year
ending 31 December 2007 is less than #525,000 or if year-on-year revenue growth
is less than 5%.   If year-on-year revenue growth is 5% or greater but less that
10%, #1 of consideration will be paid per #1 profit after tax over #525,000 up
to a maximum payment of #500,000.   If year-on-year revenue growth is 10% or
greater but less than 15%, #2 of consideration will be paid per #1 profit after
tax over #525,000 up to a maximum of #1,000,000.   If year-on-year revenue
growth is 15% or greater, #3 consideration will be paid per #1 profit after tax
over #525,000 up to a maximum payment of #1,500,000.    Any deferred
consideration due will be payable 75% in cash and 25% in Ordinary Shares which
will be subject of a six month lock-up.



Under the terms of the acquisition agreement and a tax covenant entered into
between the Company and the vendors of Redhill Analysts (the "Acquisition
Agreement"), the vendors have given warranties and indemnities in respect of
certain business, taxation and other matters subject to agreed limitations on
liability.  The Acquisition Agreement is conditional upon the facilities
agreement between the Company and Barclays Bank PLC becoming unconditional and
not
being terminated prior to Completion.  The anticipated date for Completion is 31
December 2006.



Overview of Silverdell (UK)



Silverdell (UK) was established in 1979 and is one of the UK's leading asbestos
remediation contractors.  Asbestos remediation involves the controlled removal,
encapsulation and/or labelling of asbestos and asbestos containing materials.
Silverdell (UK) often provides this remediation work in conjunction with
ancillary services, which include consultancy, staff training, ventilation
decontamination and minor construction work.  Silverdell (UK) has offices in
London, Bradford, Leicester and Cardiff.



Silverdell (UK) has a blue chip customer base and works for FTSE 100 companies
as well as central and local government.  Corporate clients are drawn from a
broad range of sectors including utilities, property and retail.



Over one third of Silverdell (UK)'s revenue is underpinned by framework
contracts. Silverdell (UK) has also been involved with a number of prestigious
projects, such as the refurbishment

of the Old Admiralty Building and the restoration of the Royal Festival Hall.



Silverdell (UK) has held a full HSE Asbestos Licence (required for the removal
and encapsulation of asbestos) continuously since its initial grant in 1984 and
in March 2006 this licence was renewed until 2009.



Silverdell (UK) has an excellent health and safety record amongst its industry
peers.  In 2006 Silverdell (UK) received an award from the Royal Association for
the Prevention of Accidents ("ROSPA").  ROSPA awards companies who show a
commitment to the prevention of accidents within the workplace through systems
and procedures that empower employees to work in a more knowledgeable manner
when it comes to health and safety.



ENDS


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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