Mortice Limited Acquires Tenon Facility Management Singapore Pte. Ltd.
Mortice Limited, the AIM listed security and facilities management company, announces that it has, through its wholly-owned subsidiary, Tenon Facility Management Singapore Pte. Ltd, acquired 51% of the issued and paid-up capital of Frontline Security Pte. Ltd, a company incorporated in Singapore, carrying on the business of provider of security services and products, for a maximum consideration of SGD 4.03m (approximately £1.89m), in cash. In addition, Tenon Singapore has an option to acquire an additional 25% of the issued and paid-up capital of Frontline Security within the next three years. The acquisition is expected to be immediately earnings enhancing.
Tenon Singapore has paid SGD 1.28m (approximately £0.60m) to Mr Joe Singh as the initial consideration for the acquisition. Subject to Frontline Security's adjusted EBITDA for the year ending 31 December 2015 ("2015 Adjusted EBITDA"), Tenon Singapore may pay additional consideration of up to SGD 2.75m (approximately £1.29m) (subject to certain potential adjustments) to the Vendor within 30 days of the date on which the audited financial statements for Frontline Security in respect of the financial year ending 31 December 2015 become available.
If the initial consideration paid is higher than the agreed price formula based on the Adjusted 2015 EBITDA, the Vendor may be required to repay to Tenon Singapore the excess consideration paid. Under certain circumstances, Tenon Singapore may elect to require the Vendor to repurchase Tenon Singapore's 51% shareholding in Frontline Security in cash at a price equal to the initial consideration, or require the Vendor to transfer additional shares in Frontline Security to Tenon Singapore, subject to Tenon Singapore's shareholding in Frontline Security remaining below 76% of the issued and paid-up capital of Frontline Security.
About Frontline Security (www.frontlinesecurity.com.sg)
Frontline Security, is a leading provider of security manpower services, close protection officers, security systems and technology solutions, providing services serving customers across 73 sites in Singapore. In June 2015, the company employed over 220 full-time and part-time security officers.
The business was founded in 2006 and prior to today's transaction was wholly owned by Joe Singh. It also provides security management, consultancy services and training, as well as supplying a wide range of security and surveillance products including CCTV systems, GPS tracking systems, metal detectors, biometric time and attendance systems, and under vehicle surveillance systems.
Frontline Security's audited results for the year ended 31 December 2014 recorded total revenues of SGD 4.25m and a profit before tax of SGD 0.59m. The net assets of Frontline Security as at 31 December 2014 were SGD 0.99m.
The acquisition is in line with Mortice's strategy of expanding its geographical footprint and growing the business through targeted acquisitions, as well as organically, and follows on from the acquisition of UK-based Office & General Group Limited which completed in September 2015.
Commenting, Manjit Rajain, Executive Chairman of Mortice, said:
"Whilst our business is registered in Singapore, our operations have been mainly focused in India, but also in Sri Lanka, Saudi Arabia, through our joint venture there; and more recently the UK following our acquisition of Office & General. I am delighted to now extend our footprint further and to establish our operational presence in Singapore, which we see as an exciting growth market for the provision of security manpower services and other security products and services.
"This acquisition will also further enhance our ability to deliver growth over the long-term to the benefit of shareholders."