Disposal
In a filing with the London Stock Exchange, Fayrewood Plc, the owner of UK distie Interface Solutions International has announced the “proposed disposal” of Interface and another subsidiary – Systems Loans Services (SLS) – to Prime Properties Development (PPD), itself a subsidiary of Specialist Computer Holdings (SCH).
The precise amount of the cash offer is £1,976,000, with 976,000 up front, 500k after 6 months and 500k after 12, subject to potential warranty claims.
This appears to be the final part of a long term strategy to break up Fayrewood group and sell off the component parts. The board seems to think that this represented better value to shareholders than selling the whole thing in one go. Banque Magnetique, another former subsidiary of Fayrewood, was sold to UK distie Gem last December.
The Fayrewood board announced that it is unanimously in favour of the bid and gave notice of an extraordinary general meeting (EGM) to approve the move at 10am on 24th July.
Non executive chairman, David Kleeman, made this comment: “I believe we have demonstrated an ability to bring value to shareholders, a large part of which is due to the very judicious deal-making skills of both our former and current management team when the underlying businesses were bought.
“As important, was the decision to take action two years ago when we realised that the increasingly testing market conditions Europe-wide and Fayrewood's market rating were not conducive to remaining as a quoted entity, particularly as investors were demonstrating a limited appetite to fund a long-term acquisition strategy. Accordingly the Board of Fayrewood unanimously recommend approving the disposal.”
The filing offered the following summaries of the two subsidiaries in question:
Interface is a distributor of computer servers and storage equipment, personal computers and laptops. Interface employs approximately 130 people, of which the majority are based at its head office near Birmingham International Airport. The remaining staff are based in Warrington.
SLS was established in order to manage the loan of IBM 'X-series' servers and other products on behalf of IBM to potential customers during product trials and commenced trading in September 2007. SLS operates out of Interface's offices in Birmingham and also uses the same warehousing facilities. SLS employs two full time and one part time employee.
Interface turned over nearly £130 million last year, which yielded nearly 10 million in gross profit but a net loss of £571,000 before tax. It has net assets worth £2,316,000. So far we have had no indication from SCH of what its plans are for Interface.
We did manage to speak to Interface commercial director Warren Hudson, however, and he had this to say: "We're excited by the prospect. The portfolio, both in terms of product and services, that we'll be able to offer our customers will be tremendous. Our existing proposition will be enhanced by SCH's excellent logistics and back-end."
Obviously, Hudson wasn't in a position to speculate on SCH's plans, but from the above quote it seems clear that he expects SCH to keep running Interface along current lines. Assuming the deal goes through, that is.
