Chelford Group plc ("Chelford"), the IT supply chain software/services and SAP solutions Group, is pleased to announce that it has acquired Agility Systems Limited ("Agility") for a maximum consideration of up to 3.8 million.
Agility is an IT software and services business which specialises in Supply Chain execution and Warehouse Management systems integrating to ERP systems, including GEAC, J D Edwards and SSA within the consumer packaged goods and transport and logistics markets. Agility customers include Exel Logistics, Morphy Richards, Sara Lee, Courtaulds and BAE Aerospace.
Agility has developed a significant capability in RF (radio frequency) data capture systems and in RFID applications (radio frequency identification), particularly within asset tracking and supply chain applications. Agility is a Premier Honours Partner of Intermec, the leading RF and RFID hardware manufacturer, and was Intermec's first RFID approved partner in the UK. A new subsidiary, RFID Solution Centre Limited, has been formed to develop the potential of Agility's RFID consultancy services and integration software. The first RFID order has been received from GeoPost, the express parcels delivery service. Agility employs 23 staff in its Darlington offices. Kevin McDaid, Managing Director of Agility, will remain with the enlarged Group.
Agility's business complements Chelford's existing SSI and SAP Divisions and adds additional supply chain execution and warehouse management systems and RFID capabilities to the Group's existing product and service portfolio. In particular, there is potential to develop Agility's RFID activities and the Intermec relationship and to establish the new RFID Solution Centre business as the RFID delivery arm for the Group's SSI and SAP Divisions. The acquisition of Agility offers the enlarged Group the potential for further growth in new supply chain sectors, with the additional benefits of a strong position in the emerging market for RFID applications and cross-selling opportunities within the enlarged Group.
In the year to 31 December 2004, Agility's turnover was 2.55 million and profit before taxation was 427,000. Net assets at 31 December 2004 were 673,000. At completion, Agility had a cash balance of approximately 550,000.
The initial consideration has been satisfied as to 1.8 million in cash and 486,815 new Chelford ordinary shares, valued at 1.2 million at the mid-market closing price on 30 August 2005 of 246.5 pence. Further deferred consideration of up to 0.5 million and 0.3 million in cash will be made, subject to the performance of Agility, in the financial years ending 31 December 2005 and 2006 respectively. The new ordinary shares being issued to the vendors of Agility will be subject to a lock-in for twelve months from the date of acquisition.
Application has been made to the London Stock Exchange for the 486,815 new ordinary shares to be admitted to trading on AIM. It is expected that Admission will become effective and dealings in the new ordinary shares will commence on 1 September 2005.
Chelford's Chief Executive, Trevor Lewis stated: "Agility is an excellent fit with Chelford's existing activities and conforms to our strategy of acquiring complementary companies with good organic growth potential. Agility extends the Group's reach within the ERP software applications arena and adds RFID capability at a time when a strong upsurge in demand for this technology is expected within the supply chain and distribution market in which the Group has a strong presence. We expect Agility to be earnings neutral in 2005 and significantly earnings enhancing in 2006."
Chelford Group plc is based in Basingstoke, Hampshire, and its shares are quoted on AIM (stock code: CHR). Chelford now has three principal operating divisions. SSI is a developer and vendor of supply chain solutions based on its TROPOS product suite which is sold mainly to mid-sized corporate customers. Chelford SAP Solutions is a SAP solutions provider to the mid-market. Agility Systems is a supplier of supply chain execution and RFID solutions to the consumer products and transport and logistics markets.