REG - Restore PLC - Acquisition of Synertec (Holdings) Ltd

RestoreAnnouncement

13/03/2025 07:15

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RNS Number : 4534A  Restore PLC  13 March 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK MARKET ABUSE REGULATION

 

 

13 March 2025

Restore plc

("Restore" or the "Group" or the "Company")

 

Acquisition of Synertec (Holdings) Ltd

 

 

Restore plc (AIM: RST), the UK's leading provider of secure and sustainable
business services for data, information, communications and assets, today
announces the acquisition of Synertec (Holdings) Ltd ("Synertec"), a document
management business, for an initial cash consideration of £22m plus deferred
cash consideration based on Synertec's future profits.

Synertec was founded in 1999 and is a UK market leader in document solutions
and processes, sending communications both electronically and physically on
behalf of major public sector and commercial organisations, including around
75% of NHS Trusts. It has a long-established customer base with predictable
and recurring revenues, and typically wins contracts through the outsourcing
of operations previously performed in-house.  In the last year, it processed
c76m physical communications (print/mail) and c52m electronic communications
for its customers.

Synertec's proprietary software platform captures data, transforms it into the
required format, and delivers it to the end recipient either electronically or
through the more traditional medium of print and mail.  The company operates
from four sites in the UK: leasehold print facilities in Bristol, Milton
Keynes and Warrington, and a freehold site near Taunton.

Synertec's business is a highly complementary addition to Restore's
Information Management division and supports the Group's growth strategy in
broadening its offering to existing customers and facilitating the
cross-selling of Restore services to Synertec customers. The large number of
public sector and commercial bodies who still manage their communications
in-house also provides the opportunity for significant growth. The Synertec
management team were majority shareholders prior to the acquisition and will
remain with the business.

Synertec has been acquired for an initial cash consideration of £22m,
together with an existing £11m of debt, plus deferred cash consideration
based on Synertec's future profits. The deferred cash consideration is
payable, subject to Synertec achieving minimum profit levels, in 2028 and 2029
and is equal to its profits for each of the years ending 31 March 2028 and
2029. The initial cash consideration has been funded from the Group's existing
borrowing facilities.

Synertec expects revenue for the twelve months ended 31 March 2025 of c£70m,
of which around 60% relates to postage costs for physical communications which
are passed on to its customers. Adjusted operating profit for the same period
is expected to be c£5.5m. Excluding the pass-through of postage costs,
operating margins are expected to be c20%. As at last audited balance sheet
date, 31 March 2024, Synertec had gross assets of £29.6m.

The acquisition is expected to be immediately earnings enhancing.

Charles Skinner, CEO, commented:

"Synertec is a highly complementary addition to Restore and will broaden our
service offering to existing customers and provide an attractive opportunity
to accelerate growth, both for Synertec and the Group. We look forward to
bringing the businesses together and creating value for all our stakeholders."

Tom Baldock, Synertec Managing Director, commented:

"I am proud of what our teams have achieved over the last 25 years. We have a
strong platform for growth and an exciting new phase in the company's
development to look forward to. Finding the right fit was an important
consideration for us and Restore's common values will benefit both our staff
and customers".

 

Cautionary Statement: This announcement contains certain statements,
statistics and projections that are or may be forward-looking. The accuracy
and completeness of all such statements, including, without limitation,
statements regarding the future financial position, strategy, projected costs,
plans and objectives for the management of future operations of Restore and
its subsidiaries is not warranted or guaranteed. These statements typically
contain words such as 'intends', 'expects', 'anticipated', 'estimates' and
words of similar import. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. Although Restore believes that the
expectations will prove to be correct. There are a number of factors, many of
which are beyond the control of Restore, which could cause actual results and
developments to differ materially from those expressed or implied by such
forward-looking statements.

 

The person responsible for arranging for the release of this announcement on
behalf of the Company is Chris Fussell, Company Secretary.

 

 

 For further information please contact:

 Restore plc                                    www.restoreplc.com (http://www.restoreplc.com)
 Charles Skinner, CEO                           +44 (0) 207 409 2420
 Dan Baker, CFO
 Chris Fussell, Company Secretary

 Investec (Nominated Adviser and Joint Broker)  www.investec.com
 Carlton Nelson                                 +44 (0) 207 597 5970
 James Rudd

 Canaccord Genuity (Joint Broker)               www.canaccordgenuity.com (http://www.canaccordgenuity.com)
 Max Hartley                                    +44 (0) 207 523 8000
 Alex Aylen

 FTI Consulting (PR Enquiries)                  www.fticonsulting.com/uk (http://www.fticonsulting.com/uk)
 Nick Hasell                                    +44 (0) 203 727 1340
 Alex Le May

 

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