Diploma PLC
24 January 2000
Diploma Plc has sold Robert Lee (London) Ltd, a factor/wholesaler of plumbing
fittings, for a cash consideration of £5.2m (before costs) of which £0.25m has
been withheld in an escrow account for 6 months.
The consideration will be subject to adjustment based on Robert Lee's net asset
value at completion. Robert Lee's sales and profit before interest and tax for
the year ended 30th September 1999 were £11.7m and £0.5m respectively and its
net assets were £3.4m. Goodwill previously written off to reserves was £0.1m.
Diploma's strategy is to expand and invest in specialised distribution
businesses serving industries with long term growth potential and with the
opportunity for sustainable superior margins. The divestment of Robert Lee
is in line with the related strategy of reducing dependency on the more mature,
cyclical and lower margin businesses within the Group.
The proceeds from the sale of Robert Lee will be added to the Group's cash
resources. There is not expected to be any tax charge on the sale.