Tuesday, 28 September 2010

Spice Group Plc - poised for £250m takeover

A water meter business set up in 1996 with a single contract worth £3
million a year is poised for a takeover worth £250 million.

The proposed acquisition of Leeds-based Spice by private equity firm Cinven
will result in a £21 million payday for the family of founder and former
chief executive Simon Rigby.

Spice, which counts EDF Energy, Yorkshire Water and United Utilities among
its customers, rebuffed two previous approaches from Cinven but said the
current offer of 70p a share represented a good deal for customers, staff
and employees.

The utility services business was formed through a management buy-out from
Yorkshire Electricity and now generates more than £300 million a year in

As well as installing water meters for utility, industrial and commercial
clients, the company carries out specialist engineering services for the UK
electricity sector.

Mr Rigby stood down as chief executive in February during a turbulent start
to the year for the firm as it warned that profits were likely to be lower
than expected due to factors such as the extreme weather.

New chief executive Martin Towers said: "Cinven is a highly credible
institution with substantial funds at its disposal.

"As an investor, Cinven will take a long-term perspective on our business
with a view to supporting continued delivery of excellent service levels to
our customers and opportunities for our employees."

As well as the support of the Spice board, Cinven's proposed offer has the
backing of shareholders owning around 25% of the business. They include the
5% of shares held directly by Mr Rigby and the 3.5% in a Rigby family trust.

The offer represents a 40% premium on the company's share price before
Spice's announcement that it had received an approach from Cinven.


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