Acquisition of recruitment and training business
02.08.2007

Servoca Plc, which provides specialist outsourced solutions to police forces, local and national government and companies throughout the private sector, is pleased to announce that it has acquired, as a going concern, the business, trade and assets of a business trading as Windsor Recruitment (“Windsor”).

Details on Windsor
Windsor trades from six locations which are predominantly based in the north of England. Windsor, has been acquired from the administrators, Vantis Group Limited, and provides recruitment services in respect of qualified nurses, care assistants and social work professionals. In addition it also provides a range of training services and has a total staff of approximately 60. In the year to 31 December 2006, Windsor made an unaudited loss before tax of approximately £47k on turnover of approximately £9.8m. Windsor’s main clients are the NHS, Primary Care Trusts and private care providers. At 31 December 2006 Windsor had unaudited net liabilities in excess of £2m. Servoca is only acquiring the business, trade and assets of Windsor and thus will not be assuming any liabilities. The Directors believe that the acquisition will be earnings enhancing and will create critical mass for the group’s medical division by offering customers a national coverage that is largely focused on the public sector.

Terms of the acquisition
Servoca will pay an initial cash consideration of £1.37m, of which £1.16m relates to the debtor book, and the remaining £212k is in respect of the business, trade and other assets of Windsor.

Performance related deferred consideration will be payable in cash for each of the two 12 month periods following the acquisition. This will be payable at the rate of 1.875% on annual turnover billed to customers up to £8m in each of the 12 month periods. No payment will be due in respect of any 12 month period where annual turnover billed to customers falls below £5m. The maximum deferred consideration payable is capped at £300k.

Commenting on the acquisition, Darren Browne, Chief Executive, said:
“We are delighted to have completed this acquisition since it provides our medical division with national coverage at an affordable entrance price and increases the breadth of our recruitment business. The group’s performance, since the creation of Servoca on 7 June 2007, is in line with Directors expectations and we are in the process of completing the reduction of central administrative costs as previously indicated in the circular issued to shareholders on 15 May 2007.”