Zeta Compliance Group acquires Fire Strategy
Zeta Compliance Group plc, the provider of products and services to enable organisations with large estates to ensure that they systematically meet their Environmental, Health and Safety obligations, is pleased to announce that it has completed the acquisition of the entire issued share capital of The Fire Strategy Company Limited ("Fire Strategy") based in Ramsgate, Kent.
Fire Strategy was established in 2004 by Russ Timpson, the former Group Fire Safety Manager of BAA, and employs a small team of experienced and highly qualified fire engineering consultants to deliver bespoke fire engineering solutions to the private and public sector.
This acquisition will extend the expertise of the Company beyond the areas of air, water and carbon hygiene building energy management in which it currently operates and the Directors of Zeta expect the acquisition of Fire Strategy will generate opportunities for cross selling of additional services into the respective customer bases. The Company can now supply most of the statutory areas of compliance required by its clients and extend the capabilities of its propriety software, ZetaSafe.
The consideration for the acquisition consists of an initial cash payment of £195,000 to the sellers of Fire Strategy ("Sellers") together with the allotment to the Sellers of 80,000 ordinary shares of 1 penny each in the Company ("Ordinary Shares") having a market value in the aggregate of £30,000. Mr. Timpson has agreed to loan Fire Strategy the sum of £30,000 repayable in 36 equal monthly installments, which loan is to be unsecured and interest free.
In addition, an earn out formula determines the payment of additional consideration to the Sellers over the period of three years from completion of the acquisition, with the overall consideration for the acquisition of Fire Strategy being capped at £945,000. The additional consideration will be discharged in cash and Ordinary Shares in a 2:1 ratio. The cash element of the consideration will be met from the Company's existing cash resources.
In the financial year ended 31 October 2009, Fire Strategy reported unaudited revenue of £454,000. A major investment in a new product line was initiated during that year, but this product has now been discontinued. Fire Strategy reported a small profit of approximately £100,000 on continuing operations, and a break-even position for the company as a whole in the financial year ended 31 October 2009.
For the 6 months ended 30 April 2010, Fire Strategy reported unaudited revenue of £219,000 and a loss of £44,000. Without the discontinued product line, Fire Strategy would again have broken even.
The Company now has 8,773,246 ordinary shares in issue.
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