London, UK Abacus Group, will expand its reach in Europe by acquiring 101,640 shares in ECC Distribution representing 50.82% of the share capital at a price of £0.89 million in cash. The deal is due to go through on 3 October, and is being made under the terms of a call option granted to Abacus in 1999. The distribution company already operates in the UK and Nordic regions.
Abacus previously acquired 9% of ECC's share capital in August 2003 and, following the acquisition, its total holding in ECC will represent 59.82% of ECC's share capital. The shares will have been acquired in cash for a total of £1.05million.
Abacus has an option to purchase the remaining 40.18% of shares and the other shareholders of ECC have an option to sell. These options are exercisable for cash in four tranches between January 2006 and January 2009. Each purchase will be based on a multiple of a weighted average of the preceding three years' profits after taxation, subject to a maximum cap.
ECC is the UK holding company of ECC Elettronica, an Italian electronic component distributor, which is headquartered in Milan and covers Italy through a network of seven additional regional offices. The company has three divisions: ITC which sells IT peripherals; Components which acts as a representative for a number of manufacturers; and Distribution.
As at 30 September, 2002, ECC's consolidated results showed net assets of £2.11million and profits for the year before and after tax of £0.51 million and £0.17 million respectively.
Martin Kent, Chief Executive of Abacus Group said, “This expansion will strengthen our presence in Europe and we look forward to driving the business forward and exploiting the considerable market opportunities now available to us.”