Business
Strategic Investment
Strategic Investment.
About this update from Jd Sports Fashion Plc
[{"type":"text","content":"\n John David Group (The) PLC\n04 December 2007\n\n\n\n THE JOHN DAVID GROUP PLC\n\n 4 December 2007\n\n\n Strategic Investment in The Focus Group\n\n\nThe John David Group plc (JD), the sports and leisurewear retailer, announces\nthat on 3 December 2007 it acquired 49.0% of the entire issued share capital of\nFocus Brands Limited (Newco) which is a new company set up for the purposes of\nacquiring Focus Group Holdings Limited and its subsidiary companies (Focus\nGroup) from Michael Gilbert, David Gilbert, David Tolman, Mark Schaffer and\nTrevor Freeman (the Vendors).\n\n\nThe Focus Group was founded in 1976 and has become one of the leading companies\nin the UK for the design, sourcing and distribution of branded and own brand\nfootwear, apparel and accessories. Focus Group holds a number of third party\nlicences and also designs and sources product from a number of sports and\nfashion retailers. Immediately prior to this transaction taking place Focus\nGroup's UK license with Converse has been transferred outside of the Focus\nGroup.\n\n\nThe key employees of the Focus Group are its two founders, Michael Gilbert and\nDavid Gilbert, together with the Marketing and Design Director, David Tolman,\nwho joined the Focus Group in 1992. All three will continue in their current\noperational roles within the management team of the Focus Group.\n\n\nJD has invested £49,000 by way of share capital and £2.45m by way of loan notes\ninto Newco with these loan notes carrying a coupon of 1.5% above Barclays Bank\nbase rate.\n\n\nPending a refinancing of Newco, JD and the Vendors have guaranteed a £6.5m\nbridging loan facility in Newco on a several basis with JD liable for 49% of\nthis guarantee in line with its shareholding. It is intended that the\nrefinancing will take place shortly after completion. Upon refinancing, it is\nintended that the guarantee from JD and the Vendors will continue on a several\nbasis in the same proportions as the bridging loan facility.\n\n\nDeferred consideration may be payable to the Vendors in the event that the\nprofit before amortisation and after tax of the Focus Group exceeds certain\nthresholds in the period to 31 January 2013. The maximum total deferred\nconsideration that could be payable to the Vendors is approximately £12.4m.\n\n\nThe Vendors have also granted JD a call option over the 51.0% of New...