Business
Proposed Acquisition
Proposed Acquisition.
About this update from Mothercare Plc
[{"type":"text","content":"\n Mothercare PLC\n30 April 2007\n\nFor Immediate Release 28 April 2007\n\n \n\n Proposed Acquisition \n\n Of \n\n Chelsea Stores Holdings Limited ('CSHL') \n\n By \n\n Mothercare plc ('Mothercare') \n\n (the 'Proposed Acquisition') \n\n \n\nSummary\n\nThe directors of Mothercare are pleased to announce that they have agreed terms\nfor the Proposed Acquisition of CSHL, which owns and operates the Early Learning\nCentre ('ELC'), for a total consideration of £85 million. The consideration will\nbe in the form of new Mothercare ordinary shares and the assumption of CSHL's\nnet debt of approximately £36 million.\n\nHighlights\n\n• Following completion of the Proposed Acquisition, Mothercare will own\nand operate 'Early Learning Centre' as well as 'Mothercare', two specialist\nbrands closely associated with children and parenting. The directors of\nMothercare (the 'Directors') believe that both brands have a reputation for\nspecialism, quality, safety and innovation in their respective product\ncategories. With complementary target customers and product offerings, the\nDirectors believe that the brands will fit naturally together.\n\n• The Directors expect the enlarged group to deliver annual pre-tax\nsynergies of at least £8 million in the second full financial year after the\ndate upon which the acquisition becomes effective. Synergy benefits are expected\nfrom:\n\n I. Optimising the enlarged UK store portfolio: Complementary \n product offerings and additional geographic reach for\n both brands will provide benefits, particularly through:\n\n • Extending ELC into out-of-town locations, where it currently has\n limited presence;\n\n • Extending both brands into additional catchments where there is\n currently only one brand, via web-in-store, concessions or \n product inserts; and\n\n • Rationalising and right sizing the combined property portfolio,\n particularly in catchments where both are represented.\n\n II. International expansion: There will be opportunities to extend the \n global reach of the enlarged group, which will have\n 420 international franchise stores; through the introduction of the \n brands into countries where one or the other brand is not currently \n located.\n\n III. Buying and sourcing: Margin benefits are expected to arise through \n improved sourcing and in-house design capabilities and\n th...