Low & Bonar PLC - Acquisition

The Company announces that its subsidiary company, Bonar Floors Limited (“Bonar Floors”), has purchased the entire issued share capital of Westbond Limited (“Westbond”), a producer of fusion-bonded carpet tiles, from Cambrosa Holdings Limited (“Cambrosa”) pursuant to an agreement between Bonar Floors, Cambrosa, Jorgen Hansen (as covenantor) and the Company.

Subject to later adjustment for certain changes to the levels of net cash and working capital in Westbond at completion, the consideration for the acquisition will be up to a maximum of £10.9 million. An initial payment of £6.4 million has been paid in cash.

Deferred consideration will become payable in cash by 31 July 2008, dependent upon the EBITDA of Westbond for its financial year to 30 April 2008. Deferred consideration in excess of £4.1 million will be held in escrow and released on revenue thresholds from key customers during Westbond’s 2008/9 financial year being reached.

In the year ended 30 April 2007, Westbond made profits before tax of £0.6 million and at 30 April 2007 it had gross assets of £3.8 million.

Bonar Floors expects to be able to realise certain benefits from cross-selling of products, both in the UK and via the complementary international salesforce and distributor networks of the two businesses. There are also expected to be cost savings from synergies between the businesses.

Commenting on the acquisition, Paul Forman (Group Chief Executive) said:

“We are delighted to be announcing this transaction. Westbond offers an excellent opportunity to pursue our organic and acquisition driven growth strategy in both divisions following the successful acquisition of the MTX Group which we completed last week”.

Mark Sefton (Managing Director, Bonar Floors Division) said:

“The Westbond brand and product range are highly complementary to our Tessera business, and the combination of Westbond and Bonar Floors will create a very strong player in the growing European contract tile market”.

8 January 2008

Enquiries:
Low & Bonar – Kevin Higginson (Group Finance Director) +44 (0) 20 7535 3180

Tulchan Communications Group Limited – David Trenchard +44 (0) 20 7353 4200